Friday, April 23, 2010

UK - BT plea on mobile charges rejected

[ft] A court has rejected BT’s plea that it should get a payment potentially worth hundreds of millions of pounds from mobile phone operators.

The court of appeal on Tuesday issued a ruling that found in favour of the mobile operators rather than the UK’s leading fixed-line phone company.

BT has been campaigning for reductions in the wholesale charges that mobile operators levy for connecting calls to their networks.

In 2007, Ofcom, the telecommunications regulator, outlined plans under which the operators would reduce the charges over four years to 2011.

Ofcom’s decision was challenged by BT, and a tribunal concluded in April last year that the regulator should have insisted on steeper cuts in the charges compared with those proposed in 2007.

The tribunal told Ofcom that steeper cuts outlined by the Competition Commission should take effect from April 2009, but BT argued that the harsher reductions should apply retrospectively from 2007.

The court of appeal indicated that if BT’s argument was accepted, the sum of money due to the company from the mobile operators might amount to “hundreds of millions of pounds”.

However, the court concluded that the tribunal had no power to order Ofcom to apply the April 2009 ruling on a retrospective basis.

The court found in favour of Telefónica’s O2 UK, Vodafone’s British business, France Telecom’s Orange UK and Deutsche Telekom’s T-Mobile UK.

BT has been a vocal champion of cuts in the charges mobile operators levy for connecting calls to their networks.

This is because BT pays the operators large sums of money for connecting calls made by its fixed-line customers. BT gets smaller sums for connecting calls to its network because its charges are lower.

BT is not expected to appeal. It said: “We are disappointed to have lost the case but it does not affect our financial guidance.”

This month, Ofcom outlined plans under which the mobile operators would further reduce their charges for connecting calls over the four years to 2015.

Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from and redistribute by email or post to the web.

BT plea on mobile charges rejected

No comments: