One2One admits DTI's roaming plans will hit profits

Imposing conditions whereby all operators bidding for third generation (3G) mobile licences would have to allow new competitors to roam on their networks would be economically damaging, according to One2One.

In its case against the Department of Trade and Industry (DTI), the carrier told the Court of Appeal that both itself and Orange have serious economic concerns about their market positions should the roaming condition be passed.

In May, the DTI said operators wanting to bid for a licence would have to allow a new entrant to 'piggy-back' on their second generation networks. But One2One, backed by rival Orange, claimed the move transgressed the 1984 Telecoms Act, which states that any changes to licence conditions must first go before the Competition Commission (formerly the Monopolies and Mergers Commission).

The operator won its case in August, but the government is appealing against the High Court decision.

Ted Mercer, head of the IT/telecoms law group at Taylor Joynson Garrett, warned the ruling could be damaging for the UK's development of mobile communications by putting it "at the back of the race for UMTS (Universal Mobile Telecommunications Service) roll-out".

However, One2One's legal council told Lord Justice Simon Brown: "There is no doubt that the right to roam is damaging to our economic interests." He maintained that the issue should be referred to the Competition Commission to determine if it really is in the public interest to have the roaming condition.

Telecoms watchdog, Oftel, denied there would be any economic impact on operators opening up their networks.

An Oftel spokeswoman said: "We consulted all the operators and considered their responses before drawing up a draft that ensured no operator was put at an economic disadvantage."

She added that at no point had One2One expressed its concern on the issue.