Mexican operator in $2.5B stand-off with IBM - report

Mexican operator in $2.5B stand-off with IBM – report

17 APR 2014

Iusacell, Mexico’s third-largest mobile operator, has sued IBM for a whopping $2.5 billion. The lawsuit, reports Reuters, accuses ‘Big Blue’ of making fraudulent representations that caused the operator to lose $2.5 billion in profits.

“Events subsequent to the execution of the agreement have revealed that IBM both knowingly misrepresented and wrongfully concealed from Iusacell material facts both before and during the parties’ relationship,” Iusacell said in the complaint.

What exactly was misrepresented and concealed, however, remains unclear.

IBM said the lawsuit was a “transparent attempt” by Iusacell to wriggle out of its contractual obligations.

The tech giant added it had signed a long-term contract with Iusacell back in 2010, and that IBM’s Mexican unit had invested heavily in the operator.

“Despite major improvement to Iusacell’s IT infrastructure and growth in Iusacell’s revenues, Iusacell has failed to pay IBM Mexico what it is owed under the contract,” IBM said in a statement.

Telefonica was reportedly in talks with Iusacell recently about combining its Mexican operation to compete better against market leader America Movil.

Iusacell and Telefonica already share networks to cut infrastructure costs.

Author

Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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