ispONE sues Telstra, gains temporary injunction

Wholesaler ispONE has sued Telstra, gaining a temporary injunction that prevents Telstra from terminating the supply of mobile services to ispONE and potentially cutting off mobile services to 280,000 consumers.

On Monday, ispONE said it had filed an urgent application with the Federal Court in an effort to stop Telstra from terminating the supply of prepaid mobile services to the wholesaler - services that ispONE then onsells, through various retailers including Kogan and Aldi, to about 280,000 end users.

That afternoon, Justice Tony Pagone ordered Telstra to refrain from making any changes to the contract between the two companies until 4.15 pm on Tuesday, after Telstra and ispONE attempt mediation.

Kogan Mobile and Aldi, both of which sell mobile services supplied by ispONE, will also attend the mediation. If mediation fails, the case will return to court.

ispONE agreed to pay $300,000 to the court to ensure that Telstra continues to supply services until Tuesday afternoon.

The disagreement between the companies appears to stem from unpaid invoices and, in particular, the rates Telstra has been charging ispONE for data pricing on prepaid mobile plans.

According to ispONE, “Telstra claims it has a right to terminate the services due to the failure by ispONE to pay invoices issued by Telstra by their due date.”

But ispONE insists that no money is due. The wholesaler also declared that Telstra has been using an “incorrect rating of data pricing for prepaid mobile services” in its billing and, as a result, actually owes ispONE money.

The wholesaler said that Telstra “breached its agreement with ispONE” and “engaged in misleading and deceptive and unconscionable conduct”.

“ispONE also claims an entitlement to damages based on the significant problems experienced with Telstra’s mobile prepaid platform, which earlier this year left many consumers without service as there were delays in porting numbers to Telstra,” the wholesaler said.

A Telstra spokesperson said: “We have met all our contractual obligations to [ispONE]. We can’t comment on matters before the court, other than to say we will exercise all our legal rights in this case.

“Over a period of several months we have given [ispONE] every opportunity to develop a repayment plan for their debt but to date we have been unable to reach a satisfactory agreement,” the Telstra spokesperson said.

At Monday’s hearing, ispONE’s counsel said that if Telstra discontinued services to the wholesaler, it would go out of business.

“The problem is that Telstra is charging ispONE substantially more than what ispONE is charging its customers,” ispONE’s counsel said.

Telstra’s counsel said of mediation: “A lengthy mediation has been held two or three weeks ago. It was unsuccessful and my instructions are Telstra cannot see the utility of another mediation.”

ispONE’s counsel said: “It is a commercial dispute, and the reality is if all the parties get in the same room, including Kogan and Aldi … then the dispute may be able to be resolved.”

Telstra said it had a plan to limit the impact on those people using services supplied by ispONE, should it terminate the contract with the wholesaler.

Photo courtesy of /charlene under CC