Feeds

T-Mobile loses bid to reduce its Virgin spend

Stuck with a 'loss-making' agreement

  • alert
  • submit to reddit

Boost IT visibility and business value

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. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
Déjà vu: Virgin Media jacks up broadband prices
Screw copper phone lines, we're UNIQUE, bleats telco
UK fuzz want PINCODES on ALL mobile phones
Met Police calls for mandatory passwords on all new mobes
Netflix swallows yet another bitter pill, inks peering deal with TWC
Net neutrality crusader once again pays up for priority access
Fifteen zero days found in hacker router comp romp
Four routers rooted in SOHOpelessly Broken challenge
New Sprint CEO says he will lower axe on staff – but prices come first
'Very disruptive' new rates to be revealed next week
US TV stations bowl sueball directly at FCC's spectrum mega-sale
Broadcasters upset about coverage and cost as they shift up and down the dials
UK mobile coverage is BETTER than EVER, networks tell Ofcom
Regulator swallows this line and parrots it back out at us. What are they playing at?
What's the nature of your emergency, Vodafone?
Oh, you've dialled the wrong number for ad fibs, rules ASA
EE network whacked by 'PDP authentication failure' blunder
Carrier is 'aware' of cockup, working on a fix NOW
ROAD TRIP! An FCC road trip – Leahy demands net neutrality debate across US
You crashed watchdog's site, now time to crash its ears
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.