T-Mobile terminates Truphone
Mobile operator, or not?
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T-Mobile has stopped connecting its customers when they call someone using Truphone, saying the VoIP operator is overcharging for interconnection.
Instead, T-Mobile customers get a recorded announcement saying they must have misdialed.
T-Mobile says its objection is that the termination rate Truphone is asking for is about the same as it pays the other mobile network operators, while Truphone has no mobile network to support.
"Other operators have invested huge amounts of money into their networks," T-Mobile corporate communications head Simon Marks said. "Truphone has no network to maintain."
The termination fee is an amount paid to the receiving network when a call is made to a customer of that network, and the rates charged by different networks are public information. Truphone is asking for reasonable rates by mobile network standards, but if it is a fixed-network it should, arguably, be receiving a lot less.
Marks said: "It's not up to us to decide what kind of network Truphone is."
Numbers issued by Truphone start "07", so are clearly identifiable as mobile-rated by customers, and are billed as such by other operators. If the Truphone customer is outside a data connection then incoming calls are forwarded to their normal mobile number, on their GSM network, and this requires Truphone to pay a termination fee to that network.
Truphone can't afford to back down, as that would make all forwarded calls loss-making and its business unsustainable, but T-Mobile isn't going to either.
UK telecoms regulator Ofcom requires phone companies to interconnect, and Truphone reckons T-Mobile is in breach of Ofcom rules by refusing to accept its rates. However, its rates are only reasonable if Truphone is a mobile operator, so it seems likely Ofcom will be required to rule on the mobility of Truphone.
Ofcom was unavailable for comment at time of writing.
With Truphone customers not receiving calls, and those making them unsure why, Ofcom is going to have to act quickly. ®
Bootnote
Ofcom has been in touch to say they consider the whole thing to be a commercial dispute, and as long as it's not BT who are refusing to connect then they don't want to get involved. Meanwhile T-Mobile are still not connecting Truphone numbers starting 07978, though developments are expected soon.
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COMMENTS
Well said Marc-Oliver Kalis
Further to my posting last Thursday - It is invidious that T-Mobile thinks it can simply block calls to Truephone's numbers and get away with it.
I agree with everyting Marc-Oliver Kalis said in his posting - and If I were a citizen of his country and having 'excused boots status’ for making comments about fellow citizens, I think I would have launched a far more blistering attack on those erstwhile T-Mobile people, who were so aptly referred to as: Bullies, Stupid and Arrogant - may I be allowed to add to his list just one more word - "Pompous".
Who the hell do these T-Mobile people think they are? Truephone is a fledgling operator, bringing new and innovative mobile services to the UK market. They (T-Mobile) are so 'puffed up' with their own self-importance that they have probably forgotten where they came from.
Yes, 10 years ago they were once a fledgling little 2G start-up outfit themselves, called "One2One" - struggling to get a foothold in the UK mobile market (along with the other new kid on the block, Orange). Back then, the UK mobile market was dominated by Vodafone and BT Cellnet (now O2) - and lest the T-Mobile macho management should forget – they (one of the little fledglings) were protected by ‘Auntie Oftel’, through controls, which were imposed on the dominant MNOs (BT Cellnet and Vodafone).
These controls limited the amount BT Cellnet and Vodafone could charge for calls from landlines or other mobile networks. At the time when those controls were put into place, neither Orange nor One2One was regarded as a major player and neither was included in the regulation. But, about two years later (after having had a ‘period of grace’ to establish themselves and build a customer base), Orange and One2One were subjected to the same controls.
The T-Mobile macho management team really does need to re-visit its past and recognise that the position they now hold in the UK mobile market is due in no small part to the 'leg-up' they (and their predecessor One2One) were given by the UK regulator back in the late 1990’s.
Aside from the list of negative attributes mentioned earlier (i.e. bullying, management stupidity, arrogance and pompousness), it is so blatantly obvious that T-Mobile’s actions are based on fear and envy. Fear, because they see a bright new entrant coming to market with new and innovative services that they don’t have (and won’t have for many years). Envy, because Truephone’s network is effectively 4G and T-Mobile doesn’t have a hope in hell’s chance of getting 4G services running until well into the next decade.
All power to Truephone in their ‘David and Goliath’ battle.
All power to Ofcom for having the guts to issue an immediate order on T-Mobile to open Truephone’s numbers and to have them put in inclusive minutes bundles too. After all, Ofcom has no other choice - by the very nature of its unilateral action to cut off calls to Truephone, T-Mobile has committed a flagrant breach of EC interconnection regulations.
T-Mobile's argument about the costs of the network is spurious
Amortisation, operation and maintenance of the physical radio network represent a tiny proportion of T-mobile's expenditure -- I would guess less than 5%. The rest is accounted for by marketing, customer service, finance & billing, call routing etc., all of which Truphone has to bear as well.
In addition, Truphone has additional costs, including software development on the handset and other start-up costs which, if anything, should justify higher termination charges than the established mobile networks. This was precisely the logic which was advanced by Hutchison 3 and accepted by OFCOM, which resulted in the very generous termination rates paid to them for the first few years of operation right up to the present day.
T-Mob will be the loser
T-Mobile is flagrantly in breach of EC Directives 2002/19/EC and 2002/20/EC (in respect of Access and Authorisation of public electronic communications networks and associated facilities). I have no doubt that Neil Buckley, Competition Policy Director at Ofcom will be down on them like a 'ton of bricks'.
T-Mobile should take a look back over their shoulder to see where they came from. No more than 10 years ago they too were a small fledgling struggling to get a foothold in the UK mobile market. Lest they should have forgotten - their name then was One2One.
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