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T-Mobile tries new tactic to kill off cheap mobile phone calls

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T-Mobile policy decision denies access to cheap calls and leaves T-Mobile isolated among mobile operators

Core facts

* T-Mobile has refused to interconnect with mobile VoIP provider Truphone: T-Mobile customers making a call to Truphone's number range (07978 8xxxxx) will not be connected.

* T-Mobile refuses to interconnect with operators offering VoIP as a matter of policy.

* However T-Online Ventures, the venture capital arm of T-Mobile's parent company Deutsche Telekom, has just invested in VoIP provider Jajah; T-Mobile connects with BT Fusion, a VoIP service; and T-Mobile has also announced a trial of a VoIP service in USA and Germany.

* T-Mobile is required to 'make calls or otherwise transmit electronic communications to every normal telephone number', which it has refused to do in the case of Truphone and other VoIP operators.

* The other four UK major mobile network operators - 3, O2, Orange and Vodafone - all interconnect with Truphone, leaving T-Mobile isolated on this issue.

* T-Mobile's current adverts display the slogan "Setting the internet free".

* Currently a 'beta' service, Truphone's is prevented from launching fully until the 07978 8xxxxx number range is fully interconnected. Beta service customers are presently unaffected by this issue.

* Truphone recently revealed a preview of its new client software, which introduces SMS-over-IP, ‘presence’ capabilities and VoIP over 3G connections.

* Other mobile operators have employed different methods to prevent VoIP uptake. There has already been the well-publicised removal of internet telephony functionality from Nokia's popular N95 handset by Vodafone and Orange, and new data tariffs published by Vodafone that mean customers using VoIP will be charged more than for web browsing or email.

 Quotes

James Tagg, Truphone's CEO, said:

"This affects every new entrant into mobile telecommunications because the only company that can facilitate interconnection with T-Mobile is T-Mobile. To refuse is therefore an abuse of its position. It amounts to T-Mobile being able to veto a new entrant into the market. This would put telephony back 100 years, to a time when interconnections were not assured."

"If I were a shareholder I'd be asking some tough questions about whether T-Mobile is prepared for the internet age. It looks like a company in chaos with no coherent strategy for VoIP: it is both resisting VoIP and buying it, and at the same time running ads saying it sets the internet free. Maybe the left hand simply doesn't know what the right hand is doing."

"T-Mobile's move is the most aggresive act but it isn't alone in trying to find ways to slow down mobile VoIP. Vodafone and Orange tested one way by removing internet telephony from their branded Nokia N95 handsets without telling their customers, and Vodafone is planning to charge more for VoIP traffic than for web traffic on its new mobile web service."

"T-Mobile will argue that it is not 'blocking' Truphone but is merely negotiating on price. T-Mobile receives 35p per minute from its customers but is offering only 0.21p per minute to Truphone even when Truphone's costs are 9p per minute to terminate the call. T-Mobile is blocking our numbers unless we accept this loss-making offer and, since T-Mobile is the only company that can route calls from its customers it has a complete veto on the Truphone service."