Telefónica-owned carrier O2 is pursuing damages from Ericsson after a software fault led to telecom outages across 11 countries.
The outage forced affected operators to face customer complaints and reputational harm. Reports indicate O2 is seeking compensation worth “millions” from Ericsson for the disruption.
Japan’s SoftBank was also affected by the same software issue. In a company statement, SoftBank described the problem:
“The SoftBank Network Center detected software malfunction in all of the packet switching machines manufactured by Ericsson, which are installed at the Tokyo Center and the Osaka Center, covering our mobile customers nationwide.
After the incident, SoftBank received a report from Ericsson that the software has been in operation since nine months ago and the failure caused by the same software also occurred simultaneously in other telecom carriers across 11 countries, which installed the same Ericsson-made devices.”
As a result of the malfunction, many O2 customers were unable to access mobile data on the affected day.
O2 has confirmed it will refund monthly subscribers the cost equivalent of two days’ service, with refunds scheduled to be processed by the end of January.
A post widely shared on Facebook estimated the average refund to be around 82p per customer and suggested donating that amount to homeless charities instead, which the post estimated could total about £28 million if pooled.
UK regulator Ofcom has guidance addressing unprocessed refunds: when refunds cannot be returned—typically because customer details are lost or incomplete—companies are required to donate the unclaimed amounts to charity. Ofcom highlighted this approach recently when Virgin Media faced penalties for overcharging customers.
“Virgin Media has reimbursed or made donations to charity in respect of 99.8% of affected customers and the company is continuing its efforts to trace remaining customers in order to refund them,” Ofcom said in its statement. “In the event it is unable to trace these customers, it will donate the remaining refunds to charity.”
For O2’s pay-as-you-go customers, the operator announced additional compensation: a 10 percent bonus when topping up credit in the new year, or a 10 percent discount when buying mobile broadband data.
Industry events and discussions
Events such as the IoT Tech Expo, Blockchain Expo, AI & Big Data Expo and Cyber Security & Cloud Expo bring together industry leaders to discuss incidents like this one, covering network reliability, vendor accountability and customer compensation practices. These conferences take place in multiple locations, including Silicon Valley, London and Amsterdam, and offer panels and case studies on managing supplier risks and maintaining service continuity.
The outage highlights the downstream effects a single vendor software issue can have across multiple operators, from customer service disruption and regulatory scrutiny to the financial and reputational consequences for both carriers and equipment suppliers. Carriers are increasingly scrutinizing supplier software lifecycle management, testing protocols and contractual protections to reduce the likelihood of similar incidents and to ensure clear compensation terms when failures occur.