Lycamobile tries to kill T-Mobile's Mint Mobile acquisition

T-Mobile's proposed $1.35 billion purchase of Mint Mobile is facing mounting delays. Now, a T-Mobile MVNO called Lycamobile has launched a public campaign against the deal.

Mike Dano, Editorial Director, 5G & Mobile Strategies

April 23, 2024

5 Min Read
Subaskaran Allirajah is the founder of Lycamobile and a Bollywood producer.
Subaskaran Allirajah is the founder of Lycamobile and a Bollywood producer. (Source: Lycamobile)

Lycamobile, an MVNO operating across more than a dozen countries, has taken its fight against T-Mobile very, very public.

In a fiery new filing with the FCC, the London-based MVNO accused T-Mobile of a variety of anti-competitive practices, including withholding key technologies from its US subsidiary, which offers mobile services in the US over T-Mobile's network. Lycamobile entered the US market through a T-Mobile MVNO deal in 2012 and is now an established player in the space, according to analyst Jeff Moore with Wave7 Research.

"Lyca has struggled over the past several years to obtain basic functionalities from T-Mobile, such as eSIM and access to T-Mobile's 5G standalone architecture, and to get T-Mobile to fairly observe the terms of its MVNO agreement," Lycamobile wrote to the FCC. The MVNO – founded by entrepreneur and Bollywood producer Subaskaran Allirajah – counts 16 million subscribers worldwide, but just 542,000 in the US.

In its filing, Lycamobile urged federal regulators to block T-Mobile's proposed $1.35 billion purchase of rival MVNO Mint Mobile, which is backed by Hollywood actor and producer Ryan Reynolds.

"T-Mobile already provides more favorable terms to Lyca's competitors, and this situation will predictably deteriorate for independent MVNOs if T-Mobile is permitted to acquire ... Mint," Lycamobile wrote. "Lyca has serious concerns that this acquisition will only further incent T-Mobile to disadvantage Lyca so as to eliminate competition for its in-house MVNOs."

But T-Mobile is fighting back. In its own filing to the FCC, the company argued that Lycamobile's complaints were filed nine months too late – after the FCC's comment deadline – and that they are not relevant. Lycamobile "improperly seeks to interject an irrelevant private contractual dispute ... into the commission’s public interest review," according to T-Mobile.

Officials from T-Mobile declined to comment and those from Lycamobile did not respond to questions from Light Reading.

Follow the money

The escalating war between Lycamobile and T-Mobile traces its origins to a lawsuit T-Mobile filed against the MVNO in 2022. T-Mobile claims in the lawsuit that it accidentally undercharged Lycamobile for more than a year of MVNO access to its network – and that Lycamobile should have caught it.

"Lycamobile could have and should have learned ... that the invoices were underreporting data usage," according to T-Mobile's lawsuit against Lycamobile, filed in Washington.

T-Mobile said that due to problems at an unnamed third-party billing provider it did not track usage across a large portion of the international mobile subscriber identity (IMSI) numbers it allocated to Lycamobile in June of 2021. T-Mobile said it discovered the Lycamobile billing discrepancy between July and August of 2022.

But Lycamobile has a much different take on the matter.

In its response to T-Mobile's lawsuit, Lycamobile claims that it renegotiated its MVNO agreement with T-Mobile in April 2022. That renegotiated agreement was based on T-Mobile's faulty data. As a result, Lycamobile said it "concluded that its payments to T-Mobile would not increase while Lycamobile increased its customers."

So, Lycamobile went on the offense in the wireless marketplace, lowering its service prices and expanding its operation in the US. "Lycamobile opened over 60 new sales offices and increased its United States employees from about 50 to over 400, all over the country," the company said. "This substantially increased Lycamobile's cost structure and financial commitments."

According to Lycamobile's counterclaims, it was actually Lycamobile that discovered the billing problems, and it was Lycamobile that brought the situation to T-Mobile's attention.

T-Mobile was unwilling to renegotiate the terms of the companies' MVNO agreement, according to Lycamobile.

"Lycamobile relied on the false information from T-Mobile to lower its prices to customers and to expand its operations to grow its customers. Now Lycamobile has had to reduce its customer promotions, change its customer plans and scale back its growth plans, which has substantially injured Lycamobile," the company wrote.

'Anti-competitive actions'

The issue is more than just a simple contractual dispute between a wireless network operator and its MVNO partner, according to Lycamobile.

"This lawsuit is a smokescreen for T-Mobile's desire to hamper Lycamobile's ability to compete with T-Mobile by raising the fees Lycamobile must pay, which will lead to higher consumer prices, and failing that, to remove Lycamobile from the market, depriving underserved consumers of a lower cost alternative," the company wrote.

In its response to T-Mobile's lawsuit, filed in early 2023, Lycamobile wrote that T-Mobile broadly is attempting to squelch competition in the MVNO sector in general – the opposite of what T-Mobile promised to do as it worked to convince regulators to approve its $26 billion acquisition of Sprint.

"Since the merger, T-Mobile has acted anti-competitively in ways that harm consumers," Lycamobile wrote. "T-Mobile's anti-competitive actions with respect to Lycamobile will lead to higher costs for customers."

The issue with Mint

Lycamobile largely reiterated those arguments in its new filing to the FCC. The company added that T-Mobile's proposed acquisition of Ultra Mobile's Mint Mobile would only worsen the situation.

"Lyca is concerned that T-Mobile has been advantaging Ultra and Mint because of their intended acquisition of the companies while systematically disadvantaging Lyca, a close independent competitor," Lycamobile wrote. "Lyca believes that this anti-competitive behavior will only worsen if T-Mobile is permitted to bring these two additional MVNOs in-house, harming both Lyca and the vulnerable populations Lyca serves."

T-Mobile officials had hoped to close the company's proposed $1.35 billion acquisition of Mint Mobile and its estimated 3 million customers in the first quarter of 2024 – but that didn't happen. That's the second delay to the deal as the FCC continues to evaluate the proposed acquisition.

It's unclear whether Lycamobile's newest complaints might help push regulators to ultimately block the transaction.

Meantime, the court case between T-Mobile and Lycamobile is scheduled to go to trial in April of 2025.

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like