T-Mobile was the only UK mobile operator not to connect its
network to the numbers and, after negotiations broke down, the new
phone company, Truphone, asked the High Court for an interim order
forcing T-Mobile to connect its numbers. The Court agreed.
Truphone uses Voice over Internet Protocol (VoIP) technology to
transmit calls as data over the internet. Widely used in the
landline market, VoIP has not yet been commonly used in the mobile
phone market. It offers significantly cheaper call costs than
traditional connections.
Handsets using Truphone numbers connect to Wi-Fi networks where
possible. Voice traffic is sent over the internet to Truphone's
data centre, which diverts calls on to the public telephone
network. The service is intended for customers who have another
provider, whose network can be used when Wi-Fi coverage is not
available. To use the Truphone service, customers each need an
additional telephone number.
In order for T-Mobile customers to receive calls from Truphone
numbers the company has to activate those blocks of numbers on its
system. It is the only mobile network in the UK to refuse to do so.
It first refused on the grounds of price, then when the price
question was settled, it refused because it said it was unhappy
with other contractual issues.
Truphone asked for interim court orders forcing T-Mobile to
connect it while the companies wait for a full trial. It said that
the VoIP market moved so fast that it could face ruin if it had to
wait for a full trial before it could launch its service.
Truphone argued that T-Mobile's refusal to connect its numbers
was an unlawful abuse of a dominant market position without
objective justification.
Robin Knowles QC, sitting as a deputy High Court judge, said
that the balance of convenience was in making the interim
orders.
" I am quite satisfied that the risk of injustice if these
interim orders are refused outweighs the risk of injustice if they
are granted," said Knowles. "On the one side there is the risk of
injustice to Truphone in the form of potential destruction of its
viability as a business, and permanent damage to its time-critical
attempt to introduce a new service based on technology that has
been in development over several years. On the other side there is
the risk of injustice to T-Mobile in the form of its being forced
to do what all other MNOs are doing."
The two companies had settled their differences about cost by
Truphone agreeing to T-Mobile's tariffs, to which it had objected,
to ensure that a service was launched.
"The evidence is that all other MNOs have activated Truphone's
numbers," said Knowles in his ruling. "T-Mobile has activated
numbers allocated to other communications providers. It does not
contend that any technical, safety or other like issue makes it
more difficult or problematic to activate Truphone's numbers than
those allocated to other communications providers."
In order to have abused its position, T-Mobile must be deemed by
a court to have significant market power. T-Mobile said that it
only had a 22% share of the market for UK mobile phone services,
and that it would have to have a 30% share in order to be deemed to
have enough market power for market abuse laws to apply.
Truphone said that the relevant market was in fact the supply of
services to T-Mobile customers, and so that it had did have
sufficient market power.
"My present view is that Truphone's definition of the relevant
market may be too narrowly drawn, and T-Mobile's too widely drawn,"
said Knowles. "Definitions of market in this area can be variously
drawn. Although the present case is not concerned with termination
on T-Mobile's network it is notable that in concluding that each of
five mobile network operators (MNOs) (including T-Mobile) has
Significant Market Power "in the market for termination of voice
calls on its network(s)", Ofcom concluded that each MNO provided a
separate market for wholesale mobile voice call termination (Ofcom
Statement dated 27 March 2007 'Mobile call termination')."
"However even if T-Mobile's definition is used, it is to my mind
seriously arguable that a percentage somewhere between 22 and 30%
may be sufficient to create dominance in a market defined so widely
and of this nature," he said.
The case must still face a full trial, and the question of
whether or not T-Mobile had significant market power is likely to
be one of the trial's most hotly contested issues.
