These MVNOs aren’t as simple as they sound
UK broadband, landline and pay-TV provider Virgin Media (VMO2) is now facing a court action brought by another UK mobile operator, EE, in connection with a partnership that pre-dated both companies’ respective mergers.
Now part of BT-EE, the telco has launched a High Court case against VMO2, the triple play conglomerate that now includes the formerly independent mobile operator, O2. The charge is that when Virgin Media had no mobile phone operation of its own, it entered a contract with EE to resell its capacity, running a Mobile Virtual Network Operator (MVNO) called Virgin Mobile. However, BT’s misconduct allegation is that Virgin Media did not honour the agreement it made with the mobile operator. BT-EE is reportedly seeking £24.6m in compensation.
Virgin Media signed a 5-year deal with Vodafone to run its MVNO simulation, at the end of 2019, which, some have alleged, effectively ended its long-running supplier deal with EE. However, VMO2’s version of events is different. The deal it signed with Vodafone did not effectively end its deal with EE, as has been reported elsewhere. The agreement with BT provided that if EE launched 5G services to its own customers, and could not reach a commercial agreement with Virgin Media with regard to 5G services within a specified period, then Virgin Media was permitted to procure 5G services from an alternative supplier, according to VMO2. No commercial agreement on 5G services, between EE and Virgin Media, was reached. Virgin Media claims it stuck to its agreement with Vodafone in 2019. The agreement also allowed those customers provided with 5G services to be provided with 2G-4G services on the alternative supplier’s network.
However, BT is alleging that VMO2 breached the terms of their MVNO agreement by allowing non-5G customers (users of 4G and older systems) to be migrated away from EE’s network and on to O2 and its Vodafone based platforms before its contract had formally expired. BT says it warned Virgin about this on multiple occasions, but the operator allegedly refused to carry out any checks.
The accused, VMO2, said it plans to “robustly defend” itself. “The case could have implications for other MVNO agreements in the future,” said consultant Mark Jackson at ISP Review. “Operators might sometimes use different methods to start migrating users ahead of time and without prior agreement.”
A BT Spokesperson confirmed that it 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,” said BT.
A Virgin Media spokesperson said otherwise: “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 and which launched 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. 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. We will robustly defend our position against this claim.”