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Britain’s big four mobile phone operators are being sued for up to £250 million by rival 3 over an alleged conspiracy to shut it out of the UK market by deterring customers wanting to switch to its network, The Times has learnt.
Vodafone, T-Mobile, Orange and O2 are accused of colluding to withhold details needed for potential 3 customers to move their phone numbers from existing operators.
The four are also accused of abusing their dominant market position in what could be the largest competition case of its kind when it comes to the High Court next week.
For several years, Ofcom, the telecoms watchdog, has faced pressure both from 3 and consumer groups to improve the system that allows mobile phone owners to switch networks. Since 1997, customers have been able to keep their number when they move operator, but the process is convoluted and takes five working days. It requires customers to initiate the process and relies on their existing operator to provide a switching code.
Mobile companies have little incentive to explain the process to customers. In addition, incoming calls must be permanently routed by them once the switch has been completed.
Yesterday, Ofcom, which has been examining the process since the summer, introduced new rules aimed at making it much easier and more convenient for consumers to switch.
By April, the process must be completed in two working days. An Ofcom spokesman said: “We want consumers to feel that their mobile number is their own property and that they may take advantage of the deals available to them by easily taking their number with them.”
A near-instant switching process, similar to that already in operation in many countries, will not be introduced until 2009.
Many of the big operators have resisted the change. Some claim it will increase “slamming”, where customers are duped into switching network against their will. They also complain that the changes – including the price of a new database with all switched numbers – could cost them up to £100 million.
As the smallest of the main five mobile operators, with just 7 per cent market share by revenues, 3 claimed it has been hit hardest by the failure to speed up the system.
It is understood that the group, owned by Hong Kong’s Hutchison Whampoa, has called for a two-day hearing before a top commercial judge and hopes to force the other operators to disclose copies of documents dating back four years.
One source involved in defending the action said that 3’s suit was “a fishing exercise which abuses new court rules on preaction disclosure. If this is allowed, we would have to search papers, copies of e-mails and other documents that stretch miles high.”
It is thought 3 alleges that millions of potential customers who wanted to take out new contracts with it had been forced to take their business elsewhere because of delays made on purpose by the other mobile operators in handing over the codes that allow users to keep their phone numbers.
Next week’s hearing is known as a preapplication disclosure claim. It is the first time the sides will meet after months of correspondence between all the parties. 3 will await the outcome of the hearing before finalising its claim form. A full hearing may still be months away.
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