Circles.Life parent Liberty Wireless 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 into 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 that 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, 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, court documents obtained by The Business Times showed.

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

The asset manager Keppel said the outcome of the proceedings is not expected to affect or delay the completion of its proposed sale of M1’s telco business.

Keppel in August proposed to divest M1’s telco business to mobile network operator Simba Telecom for an enterprise value of S$1.43 billion.

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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 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.”

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 IMDA, which is pending.

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 is one such operator.

Responding to queries from BT, Circles declined to comment on the matter, given that it is before the courts.

“We want to reassure our customers and partners that this will not affect our day-to-day operations as discussed,” it said.

Tuas, the parent company of Simba, said in an announcement filed on the Australian Securities Exchange website that it will monitor the legal proceedings as they progress.

Liberty Wireless will be represented by Jaikanth Shankar from Davinder Singh Chambers, while M1 will be represented by Wendy Lin from WongPartnership.

A case conference has been scheduled for Oct 21.

Keppel shares closed flat at S$9.16 on Monday.