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Gloves off as Imagine sues Motorola for USD153m over alleged rollout delays

1 Jun 2011

Irish alternative broadband services provider Imagine Communications Group is suing telecoms equipment maker Motorola for EUR107 million (USD153 million) over alleged difficulties with connecting its WiMAX customers to the internet. Imagine has accused the US firm of breaching agreements related to the planned deployment of an end-to-end WiMAX network in the Republic, which it claims has created financial problems for the operator because of connectivity issues or a failure even to connect customers to the internet.

As reported by CommsUpdate on 1 March 2011 Imagine said it was looking to bring its case before the commercial court, contending at the time that the vendor’s failure had already resulted in it incurring losses of EUR17 million to date, a figure that could rise to as much as EUR90 million by end-2013. For its part Motorola, which was bought by Nokia Siemens Networks (NSN) for USD1.2 billion in 2010, counters that it has complied with its obligations. However, Imagine believes that Motorola is guilty of side-stepping its responsibility and that since October 2010 it has tried to push Imagine towards NSN to resolve any issues. Imagine’s business rollout strategy envisaged 234 base stations would be installed by the end of 2010. However, so far Imagine says that only 125 base stations have been installed, having a dramatic impact on its working capital and resources.

According to the Irish Independent newspaper, the High Court heard yesterday that Imagine is claiming that the rollout delays have ‘significantly depleted’ its working capital, forcing it to restructure its debt and take on new debt in order to continue operations. It is understood that around 20,000 customers could be affected by the lawsuit, which Motorola is looking to have dismissed on the grounds that the case being brought by the altnet and two of its units – IBB Internet Services and Irish Broadband Internet Services Ltd, trading as Imagine Networks – is ‘embarrassing’.

Ireland, Imagine Communications, Motorola

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