Friday, 18 September 2009

More legal challenges for Sprint’s Virgin Mobile buy out – USA

iPCS Wireless, Horizon Personal Communications and Bright Personal Communications Services have collectively filed a complaint at the Circuit Court of Cook County, Illinois, against Sprint’s intended buy out of Virgin Mobile.

The collective argue that they have a contractual agreement with Sprint which bars the latter from directly competing against them within their territories. The three companies act as Sprint resellers. Individually each network owns a portion of the network which is classed as the Sprint network. The arrangement is similar to a domestic roaming agreement; the smaller networks are able to provide access to a nationwide network (Sprint) and in return the nationwide network need not build out base stations where the small networks operate, but can still provide improved coverage for its direct subscribers.

The difference with the Virgin Mobile network is that Virgin being an MVNO had no network but still resold services anywhere across the US. With the continuation of the Virgin service but owned by Sprint, it would indeed see a Sprint owned operation effectively break these non-competitive agreements.