Truphone case - T-Mobile presses the legal red button
The can of worms is open now.
T-Mobile has been ordered by a judge to route calls to VoIP operator, Truphone - but the ruling opens the door to an acrimonious trial (it looks to us as if one the two isn't telling the truth) which could signal a vicious struggle between VoIP providers and mobile operators.
T-Mobile blocked calls from its subscribers to the 079788 range of mobile numbers that Truphone owns, which Truphone is planning to use for a service it will be launching in the next few weeks, that lets users make VoIP calls from dual-mode handsets using Wi-Fi. T-Mobile currently routes calls to Truphone's beta test service which uses the 07624 range of numbers rented from Manx Telecom.
The dispute is over costs. Truphone says it originally asked for a rate of around 6p, which it says is within the range of the fees charged by other mobile operators, and was negotiated through BT, which will carry out the actual interconnection. Truphone says other mobile operators agreed to these terms and activiated its numbers, but T-Mobile offered only 0.21p, a price which Truphone says means it would make a loss on each call it terminated.
T-Mobile disputes these figures. Last month, the company told us that Truphone's asking price was "rhe highest termination fee in the industry", and "significantly more than any other mobile phone operator," T-Mobile would not quote actual figures, but clearly T-Mobile and Truphone can't both be right here - unless T-Mobile meant to make a comparison with the fixed line operators, because it wants to classify Truphone amongst their number.
The big operator's case is that Truphone isn't a mobile operator at all, because it isn't running a network, and plans to terminate calls over Wi-Fi connections networks that don't cost Truphone a penny, so it shouldn't charge a mobile operator's termination fee.
When the Truphone user is not at a Wi-Fi hotspot, the service will forward calls to their phone's ordinary number. Routing these calls back out to the mobile network will cost Truphone, which says its termination fee is designed to cover the cost its calls will incur - though at the moment it is only guessing how many such calls it will have to handle.
Truphone asked the court for an injunction forcing T-Mobile to route calls to its numbers saying that, since T-Mobile has around 25 percent of the UK's mobile market, it can't launch its service till these numbers are activated, and that T-Mobile's "purported attempts to negotatiate" are in fact a delaying tactic.
The High Court of Justice ruled that Truphone has a case (its ruling is online), so T-Mobile has been instructed to route calls to the Truphone numbers from Monday 23 July, while the case is being heard.
However, T-Mobile has been instructed to pay only the 0.21p rate, which it offered, and says was in line with fixed operators. It appears that Truphone has accepted this price for now, but intends to raise a dispute on the actual fee through Ofcom.
Analysts see this as first blood to the VoIP movement: "Obviously there are arguments and counter-arguments on both sides, but from my point of view the fact that T-Mobile blocked access to numbers that their subscribers could reasonably expect to reach was a step too far," said Dean Bubley of Disruptive Analysis. "While I certainly appreciate the desire of operators not to subsidise WLAN-capable handsets and then see that subsidy used against them, the notion that they can just arbitrarily block outbound calls to number ranges they don't like is ridiculous."
T-Mobile claims to be a supporter of VoIP, and has pointed out in the past that Truphone's software will run on its dual-mode handsets, as will other VoIP providers' products. Truphone, says T-Mobile, is trying to make money out of its rivals through terminations, instead of from its customers.
Truphone has yet to launch its service - and we can expect that shortly. Cynically, we might expect it at the point when the trial publicity and whatever deal it has with T-Mobile at that stage combine in the most favourable way.
In the long term, however, by letting the situation reach this stage, T-Mobile may have opened a can of worms it would rather have left closed, according to Bubley.
In order not to appear hypocritical, he says T-Mobile will have to refuse to pay full-rate interconnect fees to other VoIP services such as BT Fusion or Orange Unik (or possibly even T-Mobile US' UMA service) as they have lower costs.
And, if termination fees are to be based on costs, then fixed operators - and users - should be able to look at the prices operators like T-Mobile are charging for types of call that are in fact cheap to terminate - for instance voicemail. And since mobile operators will eventually all move to VoIP themselves, then all call charges should go down.
"T-Mobile is therefore implicitly staking a claim to only 0.21p per minute interconnect, when it transitions its cellular network to all-IP LTE (long term evolution), presumably around 2011," says Bubley. "That will have to use VoIP, as circuit-switched telephony isn't supported." At that stage, then all the other mobile operators could offer the low termination rate to T-Mobile.
"Basically, T-Mobile's short-term hissy fit has long term ramifications," he says. It's been a stand-off till now, but "T-Mobile UK has just pressed the big red button withoiut thinking of the longer-term issues."