Feeds

T-Mobile loses bid to reduce its Virgin spend

Stuck with a 'loss-making' agreement

  • alert
  • submit to reddit

Choosing a cloud hosting partner with confidence

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. ®

Intelligent flash storage arrays

Whitepapers

Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.