Branson may float Virgin Mobile

SIR RICHARD Branson has settled his long-running dispute with German phone group T-Mobile in a move that could lead to the £750m-plus flotation of Virgin Mobile later this year.

Branson's Virgin Group is buying out T-Mobile's 50% stake in Virgin Mobile, giving it 100% control, and has settled all outstanding litigation with T-Mobile. Branson said: 'We are delighted not only to have reached a settlement with T-Mobile but to have mapped out a secure and exciting future, one which sees us working more closely together.'

A float would mark Branson's return to the UK stock market for the first time since 1988 when he took Virgin Group private, complaining of City short-termism. He floated his Virgin Blue airline in Australia last month.

Virgin, which says a float is a possibility, is believed to have appointed City advisers to work on it. Virgin Mobile spokesman Steven Day said: 'This certainly removes one of the barriers to a possible flotation.'

The two sides had been bogged down in a protracted and a complex legal battle over revenue sharing and other issues. T-Mobile lost a court battle with Virgin last year and Virgin was set to countersue this year.

As part of the settlement, T-Mobile will receive 25% of any value over £550m achieved by a float or trade sale, up to a maximum of £100m. T-Mobile, part of Deutsche Telekom, supplies the technical backbone and network for Virgin Mobile. Today's pact locks in Virgin Mobile as a wholesale customer for at least the next 10 years.

Brian McBride, managing director of T-Mobile, said: 'Any disagreements of the past are well and truly behind us.'

Virgin Mobile has 3.6m customers and is one of the fastest-growing operators.