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Last Updated: Thursday, 29 January, 2004, 16:33 GMT
Virgin Mobile on road to market
Mobile phone
The sale paves the way for a stock market flotation of Virgin Mobile
German-owned cellphone group T-Mobile is to sell its 50% stake in UK mobile phone joint venture Virgin Mobile, paving the way for a flotation.

The Deutsche-Telekom arm will surrender its Virgin Mobile holding to Virgin Group, ending a long-running legal row between the two partners.

In return, T-Mobile will secure 25% of the proceeds if Virgin Mobile floats within the next two and a half years.

Industry experts reckon Virgin Mobile could be valued at as much as 1bn.

Virgin's entrepreneur boss Richard Branson has been keen to prepare Virgin Mobile, the UK's fifth-largest mobile phone group, for a stock market debut.

Bitter row

Deutsche Telekom's stake sale brings to an end a bitter battle over the amount of money T-Mobile paid Virgin Mobile for marketing support.

T-Mobile launched a court case against both Virgin and Virgin Mobile in 2002 with the aim of terminating their joint venture.

Virgin counter-sued, accusing T-Mobile of not honouring the terms and conditions of their partnership, which, it claimed, restricted Virgin Mobile's ability to offer customers more advanced mobile data services.

T-Mobile is now freed from paying monthly "marketing support" fees to Virgin Mobile.

Now their differences have been resolved, the two partners have agreed to a new telecoms supply contract running for a minimum of 10 years with "enhanced commercial terms for both parties".

Virgin Group chairman Richard Branson said: "This is an exciting beginning to 2004 for Virgin Mobile - and it's going to get even better."

T-Mobile UK managing director Brian McBride said: "This is a great deal for T-Mobile, for Virgin and for Virgin Mobile. It provides substantial benefits for all parties."


SEE ALSO:
'Tug-of-love' over Virgin Mobile
10 Mar 03  |  Business
Ringing tunes come to UK mobiles
04 Dec 03  |  Technology
Virgin Mobile reports strong sales
23 Jan 03  |  Business


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