BT and Virgin Media in High Court fight over 5G ‘contract breach’
BT’S MOBILE operator EE has accused Virgin Mobile of a “reckless” and “wilful” breach of contract, as it launched a £24.6m claim against the telecoms operator.
Britain’s biggest mobile network wants to claw back revenue it claims to have lost after Virgin Mobile chose Vodafone’s network to underpin its 5G service.
Virgin Mobile struck a deal in 2013 for EE to provide wholesale access to its 2G, 3G and 4G network, but the pair failed to extend that contract to cover the rollout of faster 5G. The mobile operator owned by Virgin Media O2 opted instead for Vodafone to provide the next-generation connectivity, which it launched in January last year.
As part of the agreement, Virgin Mobile agreed with EE not to offer customers 2G, 3G and 4G services on Vodafone’s network unless they had already bought 5G access.
However, EE has accused Virgin of breaching its contract by shifting customers away from its network that were not using the 5G, or recruiting new customers on to its Vodafone service that were not planning to take faster 5G connectivity.
It is understood that Virgin Mobile believed it had satisfied the terms of the contract by providing those customers with a 5G-enabled SIM card.
The Liberty Global-backed mobile operator does not believe there were extra obligations that meant customers had to be receiving a 5G signal, or own a 5G smartphone.
In the particulars of the claim submitted to the High Court, EE said Virgin Mobile’s alleged breaches were “reckless and/or wilful” and that no reasonable person could have misinterpreted what the clauses meant.
A Virgin Media O2 spokesman said: “We always complied with the terms of our former mobile agreement with BT ... At no point were non-5g enabled customers migrated to either the Vodafone or O2 networks while our agreement with BT was in place.”
EE claims that it gave Virgin Mobile “multiple warnings” and told it to track customers that were moving to ensure they had 5G devices and were using 5G.
The mobile operator added that Virgin could have paid an early exit fee to end the agreement with them, but had opted not to do so.
The Virgin Media spokesman added: “We will robustly defend our position against this claim.”
A BT spokesman said: “It would be inappropriate to comment further due to the ongoing legal proceedings.” Virgin Media O2 completed a £31bn merger last summer, pledging to rival BT in the battle for broadband-to-5g customers. The merger came after a series of deals in the telecoms industry.
In 2015, BT reached a £12.5bn takeover deal with EE, which was followed by American Comcast’s £30bn acquisition of Sky’s business in the UK, Germany and Italy in 2018.
Last month, The Daily Telegraph reported that the mobile operator was exploring a bid to buy Talktalk. A deal would unite Britain’s third and fourth largest broadband providers, reaching a total of 31.2m customers across all its services, and would strengthen the company’s ambition to take on BT.
Meanwhile, BT has recently cleared a government national security assessment over its largest shareholder, the French billionaire Patrick Drahi. Mr Drahi, who has driven debt-fuelled buyouts of companies in France, Portugal and the US, owns an 18pc stake in BT through the telecoms group Altice.
Kwasi Kwarteng, the Business Secretary, told BT last week that he would not intervene in Altice’s decision to increase its holding by 5.9 percentage points in December. Mr Drahi retains the power to increase his stake to nearly 30pc without having to table a takeover bid.