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Virgin and T-Mobile squabble over divorce terms

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Virgin Mobile and T-Mobile are back in court over the terms of the dissolution of their mobile phone joint venture.

The nub of the dispute revolves around the £4.56 monthly flat fee paid by T-Mobile for each customer signed up by Virgin. However, it has been forced to pay this sum even if the customer is inactive. Since Virgin Mobile has three million customers signed up, who are serviced through the T-Mobile network, that is a lot of money potentially going to waste.

T-Mobile went to court earlier this year to seek the right to force Virgin to disconnect customers who had been inactive for more than 180 days.

In a previous court round in March, Mr Justice Cooke said: "In the round, in my judgment, there would be nothing unreasonable about the imposition of a 180-day rule for lack of use on an inbound and outbound basis," the FT reports.

However, his ruling came down mostly in favour of Virgin Mobile, with T-Mobile losing its fight to reduce payments. Both sides are appealing his findings.

For a while it seemed that Virgin and T-Mobile would come to an friendly divorce: no longer. Brian McBride, the new T-Mobile boss who joined from Dell, was supposed to be a fresh and calming influence, but it wasn't enough.

In the Court of Appeal yesterday, Jonathan Sumption, QC, for T-Mobile said: "Relationships between these parties have broken down - and irretrievably broken down," the FT reports.

But one level, the relationship is on an even keel, T-Mobile says. The company is trying to sell its stake in the JV to Virgin for £500m, McBride told The Independent, on Sunday. "There are a number of issues to be resolved, but we are working through them in a cordial way," he told the paper. "If we sell the stake back to Virgin then we will look for better day-to-day terms."

T-Mobile has in BT another so-called mobile virtual network operator (MVNO) waiting in the wings to mop up capacity. ®

Related stories

BT climbs into bed with T-Mobile
T-Mobile loses bid to reduce Virgin spend

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