Staying true to a litigious nature, iPCS says three of its subsidiaries have filed a complaint against Sprint Nextel because its acquisition of Virgin Mobile USA will breach the affiliates’ management agreements.
The complaint filed in the Circuit Court of Cook County, Illinois, asserts that Sprint and its related parties cannot compete against iPCS affiliates in their exclusive service areas. The affected iPCS subsidiaries are iPCS Wireless, Horizon Personal Communications and Bright Personal Communications Services.
Virgin Mobile currently operates as a reseller using Sprint’s network and offers services in iPCS affiliates’ service areas. Upon completion of acquiring Virgin Mobile, Sprint will sell its own services directly in competition with iPCS affiliates, which violates their agreements with Sprint, iPCS contends.
A Sprint spokesman said the company believes the iPCS claims are meritless.
iPCS says this is the third time in four years that Sprint has chosen to compete against its own affiliates. iPCS affiliates previously obtained judgments against Sprint in connection with its acquisition of Nextel and are currently in litigation with Sprint over its Clearwire transaction.
The iPCS affiliates are asking the court for an injunction to enjoin the closing of the Virgin Mobile transaction until the transaction complies with the terms of their agreements.
Filed Under: Industry regulations