Innovation

Former Smart50 finalist ispONE sues Telstra over pre-paid services

Patrick Stafford /

A former Smart50 finalist – which recently lost a court battle against one of the country’s largest online retailers – is back in court, suing Telstra in a bid to stop the telco from denying its supply of prepaid mobile services.

This is the second major court stoush this year for wholesale provider ispONE. In May the company lost a Supreme Court case against Kogan Mobile, claiming the company had breached its obligations under a mutual agreement – but it lost and was forced to pay costs.

Both founders of the company have appeared on the BRW Young Rich List.

The new case has ramifications for ispONE’s clients, including Kogan Mobile, Aldi Mobile and others which rely on the business for its wholesale services.

A spokesperson for ispONE told SmartCompany this morning both the company and Telstra are in mediation, after a court hearing yesterday.

Telstra claims the company is able to terminate ispONE’s services due to a failure to pay invoices. A spokesman for the telco told SmartCompany this morning it remains a creditor.

“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. We have contingency plans in place to limit the impact on end users.”

The ispONE spokesperson offered no further details on the mediation, although in the statement yesterday the company said it believes Telstra has breached its agreement, and has engaged in “misleading and deceptive and unconscionable conduct”.

ispONE believes Telstra has used an incorrect rating of data pricing for prepaid services.

“ispONE also claims an entitlement to damages based on the significant problems experienced with Telstra’s mobile prepaid platform, which earlier this year left many consumers without service as there were delays in porting numbers to Telstra.”

ispONE took court action against customer Kogan Mobile this year, also arguing the company engaged in misleading and deceptive conduct. However, the Supreme Court said ispONE had breached its obligations under the two companies’ wholesale agreement.

Justice James Judd said the case was an example of how legal action raises problems due to the “distraction it cases to business management’s time and effort”.

ispONE, founded by Zac Swindells and Chris Monching, was featured in the 2010 Smart50 list. Both have appeared on the BRW Young Rich list.

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Patrick Stafford

Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.

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