Feeds

T-Mobile loses bid to reduce its Virgin spend

Stuck with a 'loss-making' agreement

  • alert
  • submit to reddit

The Power of One Infographic

T-Mobile lost out in a High Court judgement yesterday on a dispute over how much it should pay partially estranged partner/step-child Virgin Mobile for calls for rival networks to Virgin's subscribers.

Virgin Mobile is half-owned by T-Mobile, Deutche Telecom's mobile division, and a complex joint venture agreement exists between the two.

T-Mobile is the sole carrier of calls made by Virgin's 2.5 million subscribers. Each call by a Virgin subscriber results in a set payment to T-Mobile.

Here's where it gets more complicated.

T-Mobile also makes a fixed monthly payment the other way. Through this, Virgin gets a slice of the revenues T-Mobile makes from handling calls made by subscribers of other networks to Virgin's customers.

Essentially T-Mobile argues that, under current arrangements, it makes a loss from this deal.

T-Mobile, citing "termination provisions" in its contract with Virgin, went to court to reduce these fixed monthly payments from £4.56 per customer per month to £1.71 per customer per month, today's FT reports.

The paper reports that attempts by T-Mobile's UK managing director, Harris Jones, to get Virgin to agree to lower these payments last September failed. T-Mobile eventually decided to take the dispute to court.

In a lengthy judgement yesterday, partially quoted by the FT, judges ruled in Virgin's favour.

T-Mobile had "made a calculated decision to seek to use the termination provision of joint venture... in an attempt to secure commercial advantage," the court ruled.

Virgin is pleased with the result, while T-Mobile is stuck with a loss making agreement, unless it can get yesterday's judgement overturned. The FT reports that T-Mobile is "studying" the court's ruling. ®

The Essential Guide to IT Transformation

More from The Register

next story
Major problems beset UK ISP filth filters: But it's OK, nobody uses them
It's almost as though pr0n was actually rather popular
Google Nest, ARM, Samsung pull out Thread to strangle ZigBee
But there's a flaw in Google's IP-based IoT system
Orange spent weekend spamming customers with TXTs
Zero, not infinity, is the Magic Number customers want
US freemium mobile network eyes up Europe
FreedomPop touts 'free' calls, texts and data
Apple orders huge MOUNTAIN of 80 MILLION 'Air' iPhone 6s
Bigger, harder trouser bulges foretold for fanbois
'Two-speed internet' storm turns FCC.gov into zero-speed website
Deadline for comments on net neutrality shake-up extended to Friday
NBN Co execs: No FTTN product until 2015
Faster? Not yet. Cheaper? No data
Oh girl, you jus' didn't: Level 3 slaps Verizon in Netflix throttle blowup
Just hook us up to more 10Gbps ports, backbone biz yells in tit-for-tat spat
prev story

Whitepapers

Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.