Mobile boss accused of ‘burner’ phone conspiracy before Phones 4U collapse

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The administrator claims that senior officials in the European telecommunications industry have conspired to reduce their dependence on third-party retailers and thereby increase their own profit margins. The High Court has heard that operators are seeking to coordinate their moves to ensure that none of them lose market share by being the only one to abandon the network of hundreds of 4U Phones stores.

The defendants deny all wrongdoing and are vowed to fight a lawsuit that threatens to force some of the industry’s top officials to face cross-examination. The administrator has set aside a £ 130million war chest with the backing of the creditors of Phones 4U, who believe there is compelling evidence of unlawful collusion.

According to the updated version of events presented to the High Court, EE, now owned by BT, originally wanted to continue its relationship with Phones 4U but was under the influence of its French and German owners.

The investment banks would have served as a channel of collusion. After two meetings with bankers in January 2014, EE’s CFO Neal Milsom wrote in an email that “both expressed the view that Vodafone would swiftly follow up on any action we take. [with respect to third party retailers]. It is clear that someone at Voda is clearly and consistently conveying this message.

In August, EE expected Vodafone to pull out of Phones 4U, one executive wrote. EE says the statement was only a “possible but uncertain scenario”.

Such claims will be contested at trial. According to High Court documents, the minutes of an EE management meeting in May include bullet points relating to Phones 4U, without any corresponding text. Technical review of the document revealed that it had been backed up at least 38 times over the next three weeks.

The High Court was informed: “Either a deliberate decision was taken not to document what was said on this matter at the meeting, in order to avoid highlighting anti-competitive and / or collusive contacts; or an earlier version of the record … was deleted in order to destroy this evidence. “

In its updated defense, EE said the chips were an “artifact” of minutes from a previous meeting that had been used as a template. The apparently repeated changes made to the document after the meeting were “not material”, he asserted, because “it was not unusual for such documents to be saved (or saved automatically) multiple times over a period of time. Several weeks”.

An EE spokesperson added: “These allegations are completely unfounded and we will vigorously defend ourselves throughout this process.”

The updated claim comes in addition to allegations against former O2 chief executive Ronan Dunne, who is now a senior executive at large US telecommunications operator Verizon.

In addition to seeking to coordinate the withdrawal of Phones 4U, he has reportedly approached rivals to discuss their 4G pricing strategies and their approach to handset supply negotiations with Apple.

Telefonica is also accused of deliberately destroying crucial evidence as part of a cover-up. He denies these allegations, as well as any wrongdoing, and in his defense documents the allegations of attempted collusion against Apple by Mr. Dunne were “so vague and unspecified as to be embarrassing.”


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