ispONE pays another $200k to keep Telstra services alive

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ispONE pays another $200k to keep Telstra services alive

Telco claims wholesaler is "bankrupt".

ispONE will pay a further $200,000 to ensure continuity of service from Telstra for another day while mediation between the two over unpaid bills moves into its second day.

Telstra this week threatened to terminate mobile services to the wholesaler amid claims it owes the telco $12 million.

The Victorian Federal Court on Monday granted a limited injunction until 4pm yesterday to prevent Telstra from cutting the supply of prepaid mobile services to ispONE while the case was heard, which was yesterday extended to 2:15pm today.

ispONE paid the court $300,000 for the initial injunction and $200,000 for the second.

In a late sitting that adjourned around 9.30pm last night, Justice Tony Pagone reserved his decision on whether to grant ispONE a full injunction while he considers the case.

Mediation between the parties includes representatives from ispONE customers Kogan Mobile and Aldi.

ispONE has this week also been forced to deal with a damages claim by Kogan Mobile in the Victorian Supreme Court, after the retailer was successful in its bid to stop ispONE suspensing and blocking Kogan Mobile customers for "overuse".

That case that was raised by counsel representing Telstra as they argued ispONE would be unable to pay its debts and was, they alleged, “bankrupt”.

Telstra’s legal team cited ispONE’s confidential balance sheet and profit and loss statement as proof the firm had negative equity and was insolvent.

“Whichever way this company turns, it is, with great respect, finished,” they alleged.

Counsel representing ispONE argued Telstra should amend unpaid invoices to reflect the service price ispONE believed it should have been charged. Then it would be able to clear its debt.

ispONE will claim Telstra engaged in unconscionable conduct by making representations to the wholesaler that it would match call and data pricing offered by Optus as part of the deals it was seeking to strike with Kogan Mobile and Aldi.

It also alleges Telstra asserted “commercial pressure akin to duress” in demanding ispONE make prepayments of future amounts owing in order to ensure its service wasn’t terminated.

But counsel representing Telstra argued in some cases Telstra’s pricing was more favourable than that offered by Optus, at 7.5 cents per minute versus 8 cents per minute, and 7.3 cents per SMS compared to 8 cents per SMS in the case of one plan included in the contract.

They also argued the Optus agreement was for six months, with prices variable on 48 days notice, while Telstra’s agreement was for a fixed term of three years, with pricing also fixed for three years.

“Even on the Optus rates, the deal that ispONE made with Kogan and Aldi was improvident,” counsel representing Telstra alleged, arguing ispONE took a risk and miscalculated the usage by end users with Kogan and Aldi.

Justice Pagone moved to hear arguments immediately after yesterday’s hearing was delayed due to ongoing mediation, in the hope of finalising the injunction request before moving to a full trial on the issue of misleading and deceptive conduct.

“It is not appropriate for the court to impose on any organisation, whether Telstra or any other, the obligation to provide some sort of service for which it is not likely to be paid,” he said.

Counsel representing ispONE said it could offer additional assurance of $300,000 if a trial were to proceed today, and if an injunction were granted for three weeks, it would look to the $4 million it had owing to it by month-end to make good on its undertaking.

He said ispONE had acted in good faith, facilitating discussions to allow its proprietary platform, necessary for continuity of service to prepaid mobile customers, to be made available to others.

A decision is expected by 2.15pm tomorrow. Justice Pagone said he would extend the limited injunction if he was not able to come to a decision by that time.

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