Mobile firms fear fight over new phone masts

Mobile telephone operators' plans to roll out third-generation (3G) internet services for handsets could be derailed by planning proposals due to be published next month.

Mobile telephone operators' plans to roll out third-generation (3G) internet services for handsets could be derailed by planning proposals due to be published next month.

The proposals, expected to be included in new guidance from the Department for the Environment, Transport and the Regions, could place tight restrictions on the erection of phone masts. For the first time, every mast would require full planning permission.

The guidelines will be published as the operators are drawing up plans to build up to 50,000 new masts in Britain to cope with the 3G networks.

Tim Hearn, head of site acquisition at MKI, a telecoms project management company owned by WorldCom, said that if the proposals were introduced, "the planning system would get close to meltdown".

The five mobile operators - Vodafone, Orange, One2One, BT Cellnet and TIW, backed by Hutchison Whampoa - shelled out a combined £22.5bn for the 3G licences, banking on huge future revenue growth. Any restriction on developing new services would hammer them financially. Nigel Dayton, research director at Gartner Europe, said: "Some operators could fail spectacularly."

Legal experts last week suggested that if the operators' plans to roll out 3G services were thwarted by the planning process, they may have legal grounds to challenge the Government. One source involved in bidding for a licence pointed out that there was no mention of the new planning proposals in a prospectus circulated to bidders shortly before the licence auction was launched in the summer.

Mr Dayton said: "There is going to be a stampede for sites. Potentially there could be grounds for complaint about the planning proposals."

The new proposals could catch the eye of the Treasury, which raised £22.5bn when it sold the licences. Last week it appointed consultants to see if the planning system is hindering British business, potentially reopening old wounds with John Prescott's giant environment department.

The Royal Town Planning Institute, which represents the local authority planners, has also attacked the proposals. In a letter to the DETR, the institute's director of public affairs, David Rose, says planners should not be involved in assessing the health risks of masts - one of the key objections of local communities.

The letter adds: "It seems strange to the institute that there was no attempt to appraise the environmental implications of the third gener- ation of telecommunications licences before the Government invited operators to enter into the bidding process."

The Federation of Electronic Industries, representing the five 3G licence holders, has also written to the Government, claiming that the planning system should not be used to assess health risks.

It also warned that delays in planning could force operators to break their network agreements with the Government. One condition is that on receiving a 3G licence, the operators must achieve 80 per cent coverage of the UK population by 2007.

Meanwhile, planners are braced for a deluge of new applications. Erica Mortimer, director of planning consultants CGMS, said: "The planning system is stretched at the best of times, let alone with a huge influx of mast applications."