T-Mobile USA Obtains Injunctions Against Prepaid Phone Traffickers

August 05, 2008

Judgments Entered by Federal Courts in Texas

Bellevue, Wash. — Aug. 6, 2008

T-Mobile USA, Inc. today announced it obtained two final judgments and permanent injunctions as part of the company’s ongoing efforts to combat the unauthorized bulk purchase and resale of T-Mobile prepaid mobile phones, a practice that can be harmful and misleading to consumers. One judgment was entered against defendant Rafiq Wazir Ali, individually and doing business as Fone Xchange, in a federal lawsuit filed in Houston. The other judgment was entered against ASPAC Inc., its principals and affiliates, by a federal court in Dallas, and awards T-Mobile $6.5 million in damages in addition to a permanent injunction against the defendants.

T-Mobile subsidizes its prepaid wireless phones making them more accessible to consumers who want to become T-Mobile customers. Traffickers such as Ali, Fone Xchange and ASPAC profit by pocketing those subsidies, preventing consumers from receiving the benefit of the subsidies and depriving T-Mobile and other wireless providers of new customers. Traffickers typically buy, or solicit others to buy, prepaid mobile phones in bulk from retail stores, remove the phones from their original packaging, discard warranties and manuals, hack into the phones’ software, and resell the phones and accessories to unsuspecting customers at a substantial profit.

Consumers are harmed and may be misled about the source and origin of their mobile phones, and are sold phones without the manufacturer’s warranties, accessories or user manuals. Since the phones may still carry T-Mobile’s brand, consumers may believe they are purchasing handsets manufactured for T-Mobile and covered by original warranties.

“T-Mobile is committed to protecting consumers and our company by shutting down these traffickers,” said Doug Chartier, vice president, retail partner sales, T-Mobile USA. “We are pleased by the result in these cases, and expect similar successes in our other pending and planned lawsuits.”

The stipulated final judgments and permanent injunctions, entered by Judge Lee H. Rosenthal of the Southern District of Texas and Judge Jane J. Boyle of the Northern District of Texas, respectively, permanently prohibit the defendants from engaging in any activities in any way related to the bulk purchase, unlocking or resale of T-Mobile phones and from using the T-Mobile trademark. If the defendants violate the injunctions, the orders provide a mechanism for enforcement by the courts and, in the case of Fone Xchange, carry a minimum charge of $1 million in damages to be paid to T-Mobile. Muhammad “Mubi” Mubishir, a defendant who violated a similar injunction in Houston federal court, recently pled guilty to criminal contempt of court and is scheduled to be sentenced by U.S. District Court Judge Melinda Harmon on Oct. 10.

T-Mobile has six additional lawsuits pending in federal courts across the country, as part of its concerted effort to protect consumers from prepaid phone trafficking, and has plans to file additional cases soon.

Lindsay Morio

T-Mobile USA Media Relations



About T-Mobile USA, Inc.

Based in Bellevue, Wash., T-Mobile USA, Inc. is the U.S. wireless operation of Deutsche Telekom AG. By the end of the first quarter of 2010, approximately 150 million mobile customers were served by the mobile communication segments of the Deutsche Telekom group - 33.7 million by T-Mobile USA - all via a common technology platform based on GSM and UMTS, the world's most widely used digital wireless standards. T-Mobile USA's innovative wireless products and services help empower people to connect to those who matter most. Multiple independent research studies continue to rank T-Mobile among the highest in numerous regions throughout the U.S. in wireless customer care and call quality. For more information, please visit http://www.T-Mobile.com. T-Mobile is a federally registered trademark of Deutsche Telekom AG.

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