The check was for $5.28 million, and T-Mobile wanted to pay it. The wireless carrier had a contract giving it the right to renew support for its VMware software for one more year at that price, and it tendered the amount. Broadcom, which bought VMware in November 2023 for $61 billion, refused to accept it, saying the perpetual-license era was over and T-Mobile would have to buy a subscription bundle instead. T-Mobile sued, and now it is also leaving, according to Ars Technica.
The carrier is moving tens of thousands of virtual machines off VMware, the virtualization software that underpins much of its internal network. In court filings, T-Mobile said it runs VMware across roughly 303,000 CPU cores and more than 1,000 applications, including systems tied to its billing, cybersecurity and emergency services. The migration, its executives acknowledged, is slow and difficult, which is why the company fought so hard to keep support running while it leaves.
The fight has produced a running legal drama in New York. A judge granted T-Mobile an injunction in October 2025 requiring Broadcom to provide support through August 3, 2026, at the contracted price of $5.28 million, plus a $500,000 bond. During the proceedings, T-Mobile offered $20 million for two more years of support, a proposal its vice president of technology said was meant to let the carrier complete its departure at a deliberate pace. Broadcom countered at $24 million for six products, a price it said covered more than 20 dedicated staff; T-Mobile responded that it had opened only two support cases this year.
The case has been heard by Justice Jennifer G. Schecter of the New York Supreme Court, who also handled the similar lawsuit between AT&T and Broadcom. AT&T settled on confidential terms, but the judge said in an October hearing that she considered T-Mobile’s case stronger. Broadcom’s lawyers have argued the opposite: that thousands of VMware customers have moved to subscriptions, and that T-Mobile is an outlier litigating a contract it waited too long to enforce.
T-Mobile is not alone in voting with its feet. Tesco, the British supermarket chain, has said it is removing VMware software from about 40,000 servers and has joined an antitrust lawsuit against Broadcom over the licensing practices that followed the acquisition. Retailers and carriers are not natural allies, but the two companies now share a supplier relationship that both describe as broken.
The root of the dispute is a strategy Broadcom has pursued since the VMware acquisition. The company stopped selling perpetual licenses, which let customers own software outright, and pushed everyone onto subscription bundles that pair VMware’s core virtualization with a stack of additional products. For customers with existing perpetual licenses, the effect was a steep price increase for the same software, a change Broadcom says is the industry standard and its customers say amounts to a bait-and-switch.
The scale of the migration underlines the stakes. Moving tens of thousands of virtual machines is not a weekend project; it involves re-architecting applications, retesting security, retraining staff and accepting months of operational risk. Industry executives said T-Mobile’s decision, and Tesco’s, will be studied by every large VMware customer facing a similar bill, and that the two cases may mark a threshold after which leaving VMware becomes a mainstream option rather than a threat.
Broadcom has defended its approach publicly, pointing to the thousands of customers that have accepted the subscription model and to the investments it has made in VMware’s technology. In the T-Mobile case, the company has argued that it has spent millions maintaining support for the carrier and that the contractual terms are clear. The legal proceedings continue, with the injunction set to expire on August 3, 2026, a deadline that concentrates the mind on both sides.
For the broader industry, the T-Mobile and Tesco defections are the most visible signs yet that Broadcom’s VMware strategy has a cost. The company’s revenue from VMware has grown since the acquisition, but so has the list of customers publicly working to leave. Systems integrators have built entire practices around VMware migrations, and analysts said the pipeline of customers considering a move has grown steadily through the year.
The industry context makes the timing awkward for Broadcom. VMware software has run the internal networks of much of corporate America for two decades, and its customers range from banks to hospitals to government agencies, not just telecom carriers and supermarkets. Every one of those customers is watching the T-Mobile case, and the email that Broadcom sent refusing the $5.28 million renewal, in which the company said the end of perpetual products applied to stated out-year renewals as well, has circulated through IT departments as a warning about what the subscription era means.
The outcome of the case will shape the economics of the exodus. If T-Mobile wins a declaration that it had a right to renew at the old price, other perpetual-license holders gain a stronger hand in their own negotiations; if Broadcom prevails, customers may conclude that the only path is to pay up or move out. Either way, T-Mobile has already made its decision, and the migration of tens of thousands of virtual machines is underway.
