Yahoo Finance BT and Virgin Media locked in a £25m High Court battle over ‘reckless’ 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 roll out 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 onto 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, including when we signed an agreement with Vodafone in 2019 which brought 5G to Virgin Mobile for the first time, launching in 2021.
"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 the customers that were moving to ensure they had 5G devices and were using 5G services.
The mobile operator added that Virgin could have also paid an early exit fee to end the agreement between them, but had opted not to do so.
The Virgin Media spokesman added: "Subsequently, in 2021, BT accepted our termination of the agreement with them, and all Virgin Mobile customers have now been migrated off BT’s network.
"In bringing this claim against Virgin Mobile, BT is seeking to rely on an incorrect interpretation of the former agreement and we will robustly defend our position against this claim.”
A BT spokesman added: “BT is taking legal action against Virgin Media with respect to a breach of an MVNO agreement Virgin Media had with EE. It would be inappropriate to comment further due to the ongoing legal proceedings.”
