Telstra blocked from cutting off ISPOne customers until trial

Summary:Kogan Mobile and Aldi customers can rest easy, as Telstra will not be able to cut off the mobile services for customers under wholesale reseller ISPOne until a court battle between the two companies over debt has been resolved.

The Federal Court in Victoria has placed an injunction on Telstra, preventing it from disconnecting 280,000 mobile services currently operating on the Telstra 3G mobile network through reseller ISPOne until a court case between the two companies over money owed to Telstra has been resolved.

ISPOne, which resells mobile services to smaller telcos such as Kogan Mobile and Aldi, filed an urgent application in the Federal Court on Monday , claiming that Telstra had sought to terminate services due to a failure to pay invoices. ISPOne has said that no money is due, because Telstra is calculating the amount owed based on incorrect pricing of data for prepaid mobile services.

ISPOne has claimed that Telstra is in breach of its agreement with ISPOne, and that it is entitled to damages because of problems with the wholesale service that Telstra offered, over which ISPOne said it saw a delay in mobile numbers porting to Telstra.

The two companies battled it out in court until late Wednesday night, with the court ruling that the injunction preventing Telstra from cancelling ISPOne's services will be held over until the case can be heard on an as-yet-unannounced date.

In the meantime, ISPOne has been asked to pay the court AU$300,000, but it is believed that Telstra is seeking millions of dollars that it claims the company owes Telstra.

Telstra said that it has given ISPOne many chances to pay the money owed to it.

"As the court has heard, we are a creditor of ISPOne. Over a period of several months, we have given them every opportunity to develop a repayment plan for their debt, but to date we have been unable to reach a satisfactory agreement," a Telstra spokesperson told ZDNet in a statement.

"We will continue to defend the claims raised by ISPOne. We have contingency plans in place to limit the impact on end users."

ISPOne declined to comment.

The case throws into question the future for the services sold by ISPOne's customers Kogan and Aldi. Both telcos have long contracts in place with ISPOne, but ZDNet has heard from multiple sources that Kogan Mobile is currently shopping around for a new provider to ensure a continuity of services for its hundreds of thousands of customers.

Moving to any mobile network operator that isn't Telstra may prove to be difficult, however, with both Optus and Vodafone recently moving to scale down the number of resellers on their networks, instead focusing on customer retention rather than customer acquisitions.

The move would come as no surprise to many of Kogan Mobile's customers, however. In May, ISPOne was ordered to pay Kogan Mobile damages for suspending over 700 Kogan Mobile customers who were flagged by the company to be using too much data.

The court case comes as ISPOne is reportedly restructuring and rebranding its business. A spokesperson for ISPOne denied that the rebrand is in relation to its dispute with Telstra.

"The recent communication, sent in commercial confidence, informed wholesale partners of an organisational restructure and rebrand initiative that is part of an ongoing strategy that has been in development for the past 18 months. The rebrand is not related to the legal issues currently undergoing mediation."

Topics: Telcos, Telstra

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.