Liberty Wireless, parent of Circles.Life, takes M1 to court over network agreement

[SINGAPORE] Liberty Wireless, the parent company of mobile virtual network operator (MVNO) Circles.Life, has initiated legal proceedings against M1 in relation to a contract it entered in May 2019.

The proceedings relate to mobile virtual network arrangements between Liberty Wireless and M1 under the contract, Keppel said in a bourse filing on Monday (Oct 13).

Liberty Wireless alleges that M1 wrongfully refused to enter into good faith negotiations to amend the contract “to the extent reasonably necessary or appropriate” to address the implications of the framework for the wholesale of mobile services the Infocomm Media Development Authority (IMDA) issued in January 2020.

Moreover, Liberty Wireless alleges that the 2019 contract may contain an error or mistake and said that it intends to rectify it so as to “reflect its rights to seek the foregoing reliefs”.

It is seeking a declaration that M1 is obliged to enter into such negotiations, and an order that the Keppel subsidiary enter into such negotiations with it within 14 days.

An originating application was filed by Liberty Wireless on Oct 6, according to court documents obtained by The Business Times.

The asset manager said that the outcome of the proceedings is not expected to affect or delay the completion of its proposed sale of M1’s telco business to mobile network operator Simba Telecom, announced on Aug 11.

M1 has been providing network service to Liberty Wireless since 2015, delivering voice, messaging and data access to its customers.

In August, Keppel proposed to divest M1’s telco business to Simba Telecom for an enterprise value of S$1.43 billion, in an all-cash deal.

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Given Simba’s all-cash offer bid, Keppel will receive close to S$1 billion in cash proceeds for its 83.9 per cent effective stake in M1.

Analysts said that the Simba-M1 merger would most likely benefit the entire mobile industry in Singapore, noting that since the licensing of Simba in 2016, the mobile industry has lost about S$700 million in revenue till the end of 2024 due to increased competition.

Circles chief executive officer Rameez Ansar told BT in August that the merger would benefit Circles, as it would shift the focus towards innovation instead of price competition.

Keppel said: “M1 has instructed counsel and does not find the allegations meritorious, and intends to vigorously defend its position at the appropriate forum.”

In its statement, it also said the proposed sale of M1 to Simba is pending the fulfilment or waiver of various conditions as agreed, including regulatory approval by the IMDA.

The proposed sale of M1 to Simba is pending regulatory approval by the IMDA. In their submissions to the authority, the companies pledged to retain current prices for existing mobile subscribers for at least two years after the proposed merger is completed.

As M1 had also committed to honour all existing commitments and contracts, current subscribers of its MVNOs would not be affected. Circles.Life is one such operator.

Responding to queries from BT, Circles said that it will not comment, given that the matter is in court.

It added: “We want to reassure our customers and partners that this will not affect our day-to-day operations as discussed.”

Liberty Wireless will be represented by Jaikanth Shankar from Davinder Singh Chambers.

A case conference has been scheduled for Oct 21.

On Monday, Keppel shares were 0.2 per cent or S$0.02 down at S$9.14 as at 11.32 am.