Voiceover Internet Protocol (VoIP): High Court Grants Injunction Requiring T-Mobile to Connect Calls to Truphone Numbers

  • In a ground-breaking case the High Court has granted an interim injunction under EC and UK’s competition rules.
  • This case is the first interim injunction requiring an unwilling company to contract with another party and to buy services from it.
  • In a dispute concerning Voiceover Internet Protocol (VoIP) technology, Truphone has been granted an injunction requiring T-Mobile to connect calls to Truphone numbers.
  • T-Mobile had refused to connect calls from its subscribers to Truphone numbers, claiming that the termination fees Truphone was demanding were too high.
  • Truphone claimed that this was an unlawful refusal to supply which amounted to an abuse of T-Mobile's dominant position contrary to Chapter II of the Competition Act 1998. 
  • The High Court considered Truphone’s argument that T-Mobile had abused its dominant position was ‘seriously arguable’.

Background

Software Cellular Network (trading as Truphone) is launching a new mobile telephone service using Voiceover Internet Protocol (VoIP) technology. Calls are directed over the internet to reduce costs.

The customer requires an additional telephone number to use the Truphone service. To enable a Truphone customer to receive calls from someone using the network of a Mobile Network Operator (MNO), the MNO must first activate the Truphone numbers. This involves the MNO purchasing call termination services from Truphone. The parties were unable to agree on the rates for those services and so T-Mobile has not activated the Truphone numbers.

T-Mobile is the only UK MNO not to have done this. Truphone considers that this refusal amounts to an unlawful abuse of T-Mobile’s dominant market position contrary to the Chapter II prohibition under the Competition Act 1998. Truphone therefore sought an injunction from the Court to require T-Mobile to activate the numbers.

Judgment

A serious issue to be tried?

The Court considered that even on the wide market definition proposed by T-Mobile (the UK mobile telephone market), it could not rule out the possibility that T-Mobile did hold a dominant position.

In response to the allegation of abuse of dominant position, T-Mobile responded that the termination charges proposed by Truphone were excessive. That position was undermined, at least for the interim period, by Truphone saying that it was prepared to proceed with the rates proposed by T-Mobile. T-Mobile also argued that there was no precedent for a business being obliged to buy a service (i.e. the termination charge) as opposed to make a service available. The Court considered that this was too narrow a view to take and was overly restrictive given the nature of the mobile telephone market.

Would damages be an adequate remedy?

The court considered that Truphone would lose the opportunity to enter the VoIP market if T-Mobile did not connect calls to its numbers and therefore damages would not be an adequate remedy.

Who would be most harmed / the ‘balance of convenience’ test

In terms of assessing where the ‘balance of convenience’ lay, the Court considered the fact that without interim remedy Truphone’s business proposal would either not be able to go ahead or would be materially compromised.

The Court also considered that the cross-undertaking in damages offered by Truphone meant that T-Mobile would not lose out economically should Truphone lose at trial.

The Court therefore concluded that the balance of convenience lay in granting the injunction.

Software Cellular Network Limited v T-Mobile (UK) Limited [2007] EWHC 1790 (Ch)