British Telecom and its rival, the One2One mobile phone service, were yesterday given the green light to seek a judicial review of what they claim are favourable payment terms granted for their licences to operate third-generation mobile telephones.
BT and One2One claim the Government is giving Vodafone Airtouch, a third competitor in the British communications industry, and Orange, which is currently owned by Vodafone, preferential treatment by allowing the companies an extra 180 days to pay up the £10bn total they owe the Treasury. BT says this concession is worth £2m a day in interest payments, or £360m all told.
Vodafone bid about £6bn in its own right for a third-generation licence and Orange bid £4bn.
The government has deferred payment by the two companies to give Vodafone time to sell Orange, which it acquired when it bought the German telecoms group, Mannesmann.
The sale of Orange was a condition set by regulators for approval of the monster bid, and the government accepts it is fair to allow Vodafone and Orange to untangle themselves before having to pay.
BT and One2One have claimed the interest gain for both companies is unfair and that BT and One2One ought to be compensated by the government for the interest they themselves will have foregone by paying on the nail.
In the high court yesterday , Mr Justice Morrison expressed scepticism about the BT and One2One challenge, saying that it "lacked merit", but granted leave to seek judicial review because the Department of Trade and Industry was actively supporting the move in order to obtain a firm ruling.
He was not, however, prepared to grant an injunction invalidating the auction.
Both sides will now present arguments in October.
The auction last month of third-generation franchises has brought £22.5bn into the public coffers, with five winners: BT, One2One, Vodafone, Orange and Tiw-Umts, a joint venture between Canada's Telesystem International Wireless and Hong Kong's Hutchison Whampoa.
Judge Morrison said that, at first glance, he believed the challenge was unlikely to succeed. "I find myself in this difficulty, that having prepared this case with care, my preliminary view was that this was not a case where leave or permission should be granted," he said.
But he added that: "If the applicants succeed, they will have been required to pay out money earlier than they would have done and they can be compensated for that loss."
