T-Mobile says all options open in Virgin tussle

Europe's second largest mobile operator, said on Friday that all options remained open in its relationship with Virgin Mobile,...

Europe's second largest mobile operator, said on Friday that all options remained open in its relationship with Virgin Mobile, despite legal threats to the British joint venture's ownership structure.

A spokesman for the German company, which owns half of Virgin Mobile and carries the service on its UK network, told Reuters that legal wrangling did not mean the current arrangements with its partner, the Virgin airline-to-retail conglomerate, would necessarily break down.

"We have a disagreement, and we're trying to get the best resolution to it," said the spokesman for T-Mobile, which is owned by Deutsche Telekom. T-Mobile had previously declined to comment on the troubled relationship.

He was responding to an article in an industry publication, Mobile, which quoted a T-Mobile spokesman as saying: "We would like to think that the outcome of the case is that we will renegotiate new terms with Virgin, but it may be that Virgin Mobile ends up with a different supplier.

"Continuing the status quo and present terms is not an option."

But a spokesman told Reuters it was still a possibility that its current arrangements with Virgin could continue.

Backed by British entrepreneur Richard Branson, Virgin Group has responded to a recent unsuccessful court action brought against it by T-Mobile by launching a legal action of its own.

The two partners had fought in court over fees T-Mobile pays to Virgin Mobile for each customer signed up, but a judge ruled against T-Mobile and said it had tried to "secure commercial advantages" by triggering a termination of its Virgin contract.

A source familiar with the matter said earlier this week that T-Mobile's stake in the joint venture might have to be sold, depending on the outcome of the new court battle.

Virgin Mobile's value is unclear, but it has targeted more than £400m in turnover for 2003.

The two parties are currently awaiting a time slot for Britain's High Court to hear the new case, though a source said it is not expected to have enough time until later this year.

Virgin, Britain's fifth-largest mobile operator with around 2.6 million subscribers, declined to comment on the matter, referring journalists to the court decision.

Read more on IT for small and medium-sized enterprises (SME)