Feeds

T-Mobile loses bid to reduce its Virgin spend

Stuck with a 'loss-making' agreement

  • alert
  • submit to reddit

Top three mobile application threats

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. ®

Combat fraud and increase customer satisfaction

More from The Register

next story
Virgin Media so, so SORRY for turning spam fire-hose on its punters
Hundreds of emails flood inboxes thanks to gaffe
A black box for your SUITCASE: Now your lost luggage can phone home – quite literally
Breakfast in London, lunch in NYC, and your clothes in Peru
AT&T threatens to pull out of FCC wireless auctions over purchase limits
Company wants ability to buy more spectrum space in auction
Turnbull leaves Australia's broadband blackspots in the dark
New Statement of Expectations to NBN Co offers get-out clauses for blackspot builds
Facebook claims 100 MEEELLION active users in India
Who needs China when you've got the next billion in your sights?
Facebook splats in-app chat, whacks brats into crack yakety-yak app
Jibber-jabbering addicts turfed out just as Zuck warned
Google looks to LTE and Wi-Fi to help it lube YouTube tubes
Bandwidth hogger needs tube embiggenment if it's to succeed
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.