T-Mobile and Virgin settle after fallout

An ongoing dispute between T-Mobile and Virgin looks to be drawing to a close soon as the future of Virgin Mobile, jointly owned by the two companies, is resolved.

It's thought that T-Mobile will pull out of the company, leaving the operator in the hands of Branson and chums. And the price for their share of the business? Chances are - not a lot.

But it's not all bad news for the German-owned mobile provider. The companies have come up with a new deal that should see them both right, according to reports in the Financial Times - T-Mobile may get a pay-off following an IPO of Virgin Mobile.

The new deal will also make T-Mobile Virgin's wholesale voice supplier of choice for some years.

T-Mobile had been making a payment to Virgin  – around £4 a month – for each customer that the company signed up. Under the new deal, the payments will be replaced by a proportional payout based on the amount of incoming calls handled.

Both companies are thought to have been keen to get the dispute settled quickly and painlessly - T-Mobile's efforts to get the matter resolved in court ended messily in 2003 and management didn't want to face a similar prospect again, and Branson is reported to be gearing up to float Virgin Mobile in the coming months. A Virgin Mobile spokeswoman said that a floatation was "just talk at the moment".