Every cloud has a silver lining. One’s man’s milk is another man’s poison. It’s an ill wind that blows nobody any good.
A week after taking out an injunction against Telstra to prevent it from cutting off services to its customers, ispONE has effectively admitted defeat in its long battle with Telstra. It has appointed administrators and cancelled its contract with Telstra (which Telstra would have cancelled in any case).
ispONE has debts of around $30 million, according to administrators Ferrier Hodgson, with Telstra the biggest creditor. ispONE has no comment, on anything. Its website is unchanged, and still offers services to MVNOs (mobile virtual network operators) and end customers.
As a wholesaler, ispONE was a reseller of Telstra services to over 100 retailers, covering 280,000 mostly domestic consumers of fixed line, mobile phone and Internet services. Its largest resellers were MVNOs Kogan and Aldi. Kogan alone had 120,000 ispONE users.
spONE was Telstra Wholesale’s first prepaid 3G wholesaler, in a deal announced in November 2012. It was in the news earlier this year when Kogan sued it for suspending 700 retail customers after they exceeded their ‘unlimited’ limits. In May Kogan won that case, with costs.
On Monday 12 August ispONE sought and was granted a temporary injunction preventing Telstra from terminating ispONE’s prepaid mobile customers. There followed a week of unsuccessful mediation and court hearings, at which Telstra said ispONE was insolvent and could not pay the money it owed.
ispONE countered that the only reason it was in debt was because Telstra had charged it too much, and if its invoices were revised it would be able to pay Telstra.
Now it’s all over. Mr Justice Pagone at the Federal Court in Melbourne has dismissed the case. ispONE has nowhere to go. And what of its customers’ customers? Telstra has said that Aldi’s mobile customers will continue to be served, but no such deal has been reached with Kogan, which is considering its options.
Kogan Mobile customers have been informed by Telstra, via text message, that they are no longer covered, that they cannot recharge, and that all existing prepaid services will expire in 30 days. Last night Kogan posted an announcement on its website, saying it is ‘devastated’ by the news of ispONE’s demise:
For Kogan's statement, go the the next page.