One2One, which is owned by Deutsche Telekom, paid slightly more than £4bn for its UMTS licence in last spring's auction, which raised a total of £22.5bn for the Government. Fears that mobile operators overpaid vastly for their 3G licences are partly responsible for the slump in share prices in the telecoms sector.

Harris Jones, chief executive of One2One, Britain's number four mobile operator behind Vodafone, BT Cellnet and Orange, said while the company would have preferred to have paid less for a licence, he still subscribed to the view that 3G would ultimately take off. He conceded, however, that it would not be "commercially relevant" until late 2003.

Mr Jones said he had been "probably the biggest bear in the UK on wireless access protocol", but he had now changed his view on the future of mobile, particularly with the arrival of the latest devices, which, however, still had "a long way to go".

He was speaking as directors of T-Mobil, Deutsche Telekom's mobile arm, celebrated the first anniversary of T-Motion, the content business for mobile devices in which the German telecoms giant is investing £70m. Kai Uwe Ricke, chief executive of T-Mobile International, said: "This [mobile] is an industry that is going to change the world." He said the company wanted to bring the idea of I-mode – the successful mobile system in Japan – to Europe before the Japanese did.

Nikesh Arora, T-Motion's chief executive, said he believed consumers would soon have to start paying for services and content that are currently available free on the internet.

Rene Obermann, chief executive of TD-1, Deutsche Telekom's German mobile operation, said if everything continued to be free it would be "tough" to make money. Mr Arora believed that 36 months from now T-Motion would break even in every market in which it operated.

Deutsche Telekom is considering floating T-Mobile. Mr Ricke said the company had not taken any decision on this and was under no pressure from its parent to go ahead.

Enel, the Italian utility, was last night close to a deal to buy Vodafone's fixed-line telecoms business in Italy, Infostrada, for a cut-price sum of about 16.5 trillion lire (£5.3bn). The figure represents a reduction of about 25 per cent on the price agreed last year by Enel and Vodafone, which inherited Infostrada through its takeover of Mannesmann of Germany.

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