News 2004
T-Mobile and Virgin Group resolve long-term future of Virgin Mobile
29/01/2004
London: T-Mobile, Virgin Group and Virgin Mobile today announced a new future for Virgin Mobile, the UK’s fastest growing operator. The three organisations have settled all outstanding litigation, and established new agreements, paving the way for a new era in relations between T-Mobile and Virgin Mobile.
The deal sees T-Mobile and Virgin Mobile secure an enhanced telecoms supply agreement running for a minimum 10 years, which provides substantial benefits to both companies. Features include:
- Virgin Mobile maintains its position in voice and text services, with a long-term, non-exclusive deal, including improved access to 2.5 and 3G services
- The end of the monthly Marketing Support Contribution paid by
T-Mobile, and the introduction of Virgin Mobile receiving inbound, as well as outbound, call revenues
Separately, Virgin Group is acquiring T-Mobile’s stake in Virgin Mobile. As part of the settlement, T-Mobile will have the right to receive 25% of any value over £550 million, up to a maximum payment of £100 million, in the event of any future value realisation of Virgin Mobile, within the next two and half years.
The settlement has the full support of Virgin Mobile’s bank syndicate. All changes take immediate effect.
Brian McBride, managing director of T-Mobile UK, said: “This is a great deal for T-Mobile, for Virgin and for Virgin Mobile. It provides substantial benefits for all parties. It’s also been a pleasure dealing with the Virgin team. Any disagreements of the past are well and truly behind us, and we all look forward to a long and mutually rewarding relationship. Underpinning this is the quality of T-Mobile’s network, as well as the rapidly growing strength of our whole UK business.”
Tom Alexander, chief executive of Virgin Mobile, said: “This is a new era for Virgin Mobile, one in which it will continue to thrive and prosper through its re-energised network partner and simpler corporate structure. We are delighted to have found a way forward which suits all parties, consigning the distractions of the past to history, and we are looking forward to working happily with T-Mobile long into the future.”
Sir Richard Branson, founder of the Virgin Group of companies, said: “We are delighted not only to have reached a settlement with T-Mobile but to have mapped out a secure and exciting future, one which sees us working more closely together. Virgin Mobile has proved itself an exceptional company; it continues to be ever more popular with British consumers; and it has changed the UK mobile market for the better, despite operating in one of the most competitive environments in the world. This is an exciting beginning to 2004 for Virgin Mobile – and it’s going to get even better.”
