Companies sue Motorola for €90m in broadband rollout dispute
TELECOMS giant Motorola is being sued for €90m over alleged breach of agreements related to the provision of broadband services in Ireland.
The proceedings were transferred yesterday to the Commercial Court, which fast-tracks business disputes, by Mr Justice Peter Kelly.
He made directions for the exchange of legal documents and returned the matter to June next.
The case has been brought by IBB Internet Services Ltd and Irish Broadband Internet Services Ltd (trading as Imagine Networks), and Imagine Communications Group Ltd (ICG), all with addresses at Barrow Street, Dublin, against Motorola Ltd, with registered offices at Basingstoke, Hampshire, England. The first two plaintiffs are wholly owned subsidiaries of ICG.
Paul Sreenan, for the plaintiffs, said they had contracted with Motorola in 2009 for it to provide an end-to-end broadband network nationwide in Ireland, using WiMax technology. His side was contending there were significant failures by the defendant in meeting its contractual obligations.
The plaintiffs had suffered losses of €17m to date with the estimated total losses to the end of 2013 expected to be some €90m, counsel said.
It is claimed the alleged failures of the defendant in meeting its obligations led to the plaintiffs being unable to meet known customer demand or to provide a network of the standard and specification contracted for.
The plaintiffs say their business plans envisaged some 234 base stations would be installed by the end of 2010, but just 125 stations had been installed to date.
The delays have exhausted the plaintiffs' working capital, it is claimed. The effects of the delays continue to be felt on their finances, it is claimed.
The plaintiffs are in the process of restructuring their business, which will result in some 100 staff being made redundant as a cost-saving measure, it is also alleged.
Paul Gardiner, for Motorola, said it was contending it had abided by its contract.
The court also heard Motorola is in the process of being taken over by Nokia Siemens Network (NSN).
It is also claimed that since October last, the defendant has been unwilling to engage with the plaintiffs about remedying "financial and technical problems of its own making" and instead had directed the plaintiffs toward NSN.