A dispute between Blu shareholders has prompted media speculation that the consortium will withdraw from the auction.

We are fully committed to Blu and winning a third generation licence in Italy. We fully expect to take part in the auction with our partners.

BT spokesman

The dispute centres on how to share the costs of the licence, estimated to be about 5 billion euros ($4.25bn), as well as whether BT should take a larger stake in the consortium.

BT is to meet with its partners in Blu, which include Italian motorway operator Autostrade - controlled by Italy's Benetton group - as well as Italgas and the BNL bank.

"We are fully committed to Blu and winning a third generation licence in Italy," a BT spokesman said on Tuesday.

"We fully expect to take part in the auction with our partners."

Autostrade's chief executive Vito Gamberale suggested in early October that the company's 32% stake in Blu should be reduced because it was not a strategic holding.

BT is understood to be prepared to increase its stake to 30%, not the 52% desired by the other shareholders.

Blu started operations in May this year and has about 430,000 subscribers.

Gamble for customers

Altogether, six consortiums are lining up to bid for the five Italian third generation licences.

Analysts expect the auction to bring in revenues of about 25 billion euros for the Italian Treasury, slightly less than similar auctions in the UK and Germany.

The high cost of buying these mobile licences has raised eyebrows across Europe as it is unclear whether mobile companies will be able to garner enough revenues to justify the initial outlay.

Mobile phone customers in Italy typically spend slightly less each month than their European partners on a mobile phone.