Mobile phone provider insolvent! What happens next for customers

What’s going on at Lycamobile? The mobile provider has filed for insolvency in Germany, but continues to operate. But a closer look at the situation raises questions.

Lycamobile is an old name on the mobile communications market in Germany, although not familiar to everyone. The provider was founded back in 2006, is based in London, and has been selling mainly prepaid rates in Germany since 2010, thanks to which it is aimed at people who want to make frequent calls abroad. Lycamobile uses the Vodafone network in this country and offers many rates with interesting international options. At the same time, however, Lycamobile has been in dispute with the tax office for years.

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Lycamobile insolvency due to tax debts.

As reported by Handelsblatt, Lycamobile has apparently not paid sales tax in Germany for years. The company’s reasoning: it had signed a contract with a sister company in Ireland in 2013 and was now providing various services on a commission basis in its name in Germany. Ireland is secretly considered one of the “tax havens” for foreign companies due to its low corporate tax rate of 12.5 percent (trading income) – an advantage that major corporations such as Apple, Google and Facebook also take advantage of.

However, the tax office in Germany did not want to accept the argument with the Irish sister company and insisted on the tax payments. After all, Lycamobile Germany was registered with the Federal Network Agency (BNetzA) as a service provider – a clear indication of tax liability in Germany. The tax office was also proven right in court. After several unsuccessful lawsuits and complaints, Lycamobile faced tax debts of more than 70 million euros in Germany in February 2021.

The mobile phone provider was unable to raise the high sum. Perhaps that was one reason why the company was renamed from Lycamobile Germany GmbH to Amalasandan Dienstleistungen GmbH at the beginning of May. However, the company then filed for insolvency just 11 days later.

Many questions remain unanswered

Since June, insolvency administrator Jan Roth has been trying to bring order to the documents of Amalasandan Dienstleistungen GmbH, formerly Lycamobile Germany. But this is apparently proving difficult, as reported by Handelsblatt. For the office is deserted, documents incomplete and partly opaque because of the agreement concluded in 2013 with the Irish sister company. Employees are also not tangible, as for several years apparently only one man has been working for Lycamobile Germany – managing director Christopher Tooley, who is based in London.

Against the background of the insolvency, it seems almost strange that Lycamobile’s website in Germany still exists unchanged. There is also no information about the current status of the company on it. In the imprint there is no reference to the new name Amalasandan Dienstleistungen GmbH and also the network operator Vodafone, whose network the provider uses, are not aware of the new name.

Lycamobile has been in trouble before

Lycamobile mainly sells prepaid tariffs. Since July 2017, a postal or video ID procedure has actually been required for SIM card registration. This is to prevent the misuse of cell phone numbers, as the cards cannot be used anonymously as before. However, various reports and accusations can be found on the web, according to which Lycamobile has not always taken this registration so precisely. Apparently, SIM cards registered to bogus addresses were sometimes issued. And the provider was not as strict about identity verification in other respects, either. The provider was accused by various parties of offering criminals and terrorists such as the Paris bomber an opportunity to make anonymous calls. The opaque balance sheets were also criticized even before the insolvency. There were also accusations of money laundering.

Does Lycamobile’s bankruptcy have consequences for users?

As mentioned earlier, Lycamobile’s website continues to run as usual despite the insolvency. Customers can still book rates there, top up their prepaid cards and find out about offers. Support also appears to be available as usual. Currently, the insolvency of Lycamobile has no impact on the offer and the customers. According to inquiries from Handelsblatt, there are no outstanding invoices with the partner Vodafone, which provides Lycamobile with the network. The company can therefore continue to offer the services. However, nothing is currently known about how long this will be the case.

Source

  • Handelsblatt