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ISPOne sues Telstra to stop mobile service termination

Update: The Australian Federal Court is set to decide tomorrow whether ISPOne owes Telstra hundreds of thousands of dollars for its prepaid mobile services.
Written by Josh Taylor, Contributor

Telstra mobile reseller ISPOne is embroiled in another legal dispute, this time with Telstra itself, over claims that the company has not paid its bills. Telstra is threatening to disconnect prepaid mobile services.

ISPOne, which acts as a wholesale intermediary between Telstra and other resellers such as Kogan Mobile and Aldi Mobile, has filed an urgent application in the Federal Court to seek to stop Telstra from terminating the supply of prepaid mobile services to the 280,000 customers that have active services through one of ISPOne's customers.

ISPOne has claimed that Telstra has sought to terminate the services due to a failure to pay invoices, but 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 is claiming that Telstra is now 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.

Telstra said it has yet to change its arrangements with ISPOne.

"ISPOne is a customer of Telstra Wholesale. We have met all our contractual obligations to them. We can't comment on matters before the court, other than to say we will exercise all our legal rights in this case. We have not made any changes to the arrangements with ISPOne at this time," a Telstra spokesperson said.

Following a hearing in the Federal Court in Victoria this afternoon, the Telstra  spokesperson said that the matter would be decided in the next 24 hours, with ISPOne to pay into court AU$300,000.

"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," the spokesperson said.

"We will continue to defend the claims raised by ISPOne at tomorrow's hearing."

Telstra said it had a contingency plan in place to limit the impact on those affect customers.

The court case against Telstra is the latest in the ongoing problems for ISPOne in providing Telstra 3G wholesale services. 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.

Updated August 12 2013, 5:20pm AEST:  Added Telstra comment from court case outcome

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