In November 2004 Chariot announced that it had agreed to pay $5 million to UK based softswitch manufacturer, Transcom International, for an 80 percent shareholding in Transcom Australasia Pty Ltd, the licensee for the Transcom VoIP technology for the region, and for a 37.74 percent stake in Transcom International, which planned to license the system and its associated softswitch technology in more than 60 countries. VoIP services were to be launched in Australia in early 2005 but this never happened and in June, Chariot announced that it was being sued by Transcom for $3.2 million.

Transcom has claimed that Chariot forfeit its 80 percent stake in Transcom Australasia in mid 2005 after failing to resource the business with $4 million to get the service up and running. Chariot however never acknowledged such but last week wrote down the value of its Transcom investments to zero on the basis of its perception of the value of the Transcom companies.

In a statement to the ASX it said. "Chariot now advises that considering the legal developments between Chariot and Transcom and Chariot's assessment of Transcom's future earnings, from information available to Chariot's directors at this time, it is considered that future cashflows and returns to Transcom shareholders are uncertain.

Chariot has now followed this up with the launch of its own VoIP service independent of Transcom, but in what was a less than straightforward announcement to the ASX. Under the heading: "Market Update: Voice Over Internet Protocol (VoIP)," the company said it was "[providing] the following market update in relation to its proposed national telecommunications presence being enhanced with the inclusion of a VoIP product." And it "advised today that the new VoIP service would come into effect nationally, when launched in August."

It will be available to Chariot's 100,000-plus national customer base, from as little as $10 per month with free calls between Chariot VoIP customers and an "opening special" of 15 cents un-timed Australia wide (excluding mobiles).

The company added: "Chariot VoIP does not rely on or include any intellectual property or componentry proprietary to Transcom." Chariot, however has not disclosed how it is providing the service and, in an interview with the Adelaide Advertiser declined to do so.

Transcom, however claims that the launch breaches a restraint of trade clause in Chariot's agreement with it. Transcom director, Nav Basi, told iTWire: "By Chariot [launching a VoIP service] they are in breach of the post termination restraint provisions of the wholesale distributor agreement (WDL) which prevents Chariot going out with a VoIP service for one year post termination of the WDL...[and which] allows Transcom to seek an injunction restraining Chariot from releasing a VoIP service for one year."

He provided iTWire with what he claimed to be the relevant clause from the agreement, and it does indeed reflect his claims.

Basi also said he believed that Chariot's VoIP service was based on the Asterisk open source IP telephony platform, designed primarily as an IP PABX. He claimed that "Experience and those 'in the know' are aware that Asterisk is not sufficiently robust for commercial deployment of any size when used for the purpose of a full service softswitch." However it is being used by Sydney-based broadband wireless ISP BigAir to support its VoIP service, including an IP centrex offering.

. Basi was also dismissive of Chariot's tariff, noting that even though it is billed as an "opening special" of 15 cents for an untimed national calling "this is five cents higher than that offered by engin and does not begin to compete with Transcom's planned untimed, uncapped national calling (One national plan with unlimited calling on landline)."

However he declined to answer iTWire's question as to when this service would be launched.

In the announcement of its VoIP service, Chariot managing director, Robert Horlin-Smith said: "Development of this product has been driven by customer demand. We currently have a substantial number of our customers who have expressed interest in our ability to provide a VoIP service."

Basi claimed that this statement was misleading. "The actual demand in whole or part has been generated by the Transcom service offering that CTI were obliged to run with, which is evident by Chariot displaying and promoting Transcom VoIP at the Adelaide Home Show and Channel 7's Today Tonight, where users of Chariot VoIP are interviewed on that program using a Transcom integrated access device and them saying how wonderful the VoIP service is."

Note- An earlier version of this story listed Talknet as also an Astrerisk user. The  company says this not and  never has been the case. Managing director, Bill Marlow,  told iTWire: ". We actually run and own our class 5 softswitch which gives us the necessary flexibility in our business grade offerings to cover all services and features. This is the same softswitch we installed, operate and support in our venture partners network in South Africa"

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