Mexican Mobile Network Sues IBM for $2.5 Billion in Damages
Published on: 17th Apr 2014
Note -- this news article is more than a year old.
By: Ian Mansfield
The Mexican mobile network operator Iusacell has file a USD2.5 billion lawsuit against IBM in the USA accusing it of making fraudulent representations.
The details of the allegations are scarce at the moment as the court documents are heavily redacted, but the US tech giant is accused of having "knowingly misrepresented and wrongfully concealed from Iusacell material facts both before and during the parties' relationship,"
Iusacell appears to have awarded some sort of contract to IBM in 2010 to overhaul its IT systems as the mobile network embarked on a determined effort to increase its market share.
For some reason, the company says that this plan did not work and it is now suing IBM for compensation.
In one of the few unredacted parts of the lawsuit, it is clear that Iusacell accuses IBM's systems of lacking capacity to support the services, and that "crippled" the network's performance.
Iusacell is suing for both the damages and loss of expected profits. If upheld in full, the scale of the award would exceed the estimated value of the mobile network, which is thought to be valued at around USD2 billion by its owners.
IBM countered stating that Iusacell failed to pay for the services rendered, and that it had invested significant amount in upgrading the mobile network's IT systems.
The Mexican market is dominated by America Movil, which leaves Iusavell with just 8 percent of the customers, or around 8 million customers.