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England and Wales High Court (Chancery Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Software Cellular Network Ltd v T-Mobile (UK) Ltd [2007] EWHC 1790 (Ch) (17 July 2007) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2007/1790.html Cite as: [2007] EWHC 1790 (Ch) |
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CHANCERY DIVISION
Strand, London WC2A 2LL |
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B e f o r e :
(Sitting as a Deputy High Court Judge)
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Software Cellular Network Limited |
Claimant/ Applicant |
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and |
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T-Mobile (UK) Limited |
Defendant/ Respondent |
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Mr Meredith Pickford, instructed by Charles Russell, Solicitors, for the Respondent
(Hearing date: Wednesday 11th July 2007)
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Crown Copyright ©
Introduction
The proposed new service
"The Truphone technology has been in development since 2000. It is the subject of 5 international patent applications, [and has won] industry awards in the telecoms sector. Truphone has invested significant time and expense in developing this technology. … The financial community showed its faith in our technology by making Truphone Europe's largest A round venture capital investment of 2006. … Our survival depends on our ability properly to launch our product and to do so as early as possible, given that other parties are developing similar products. …
Given the rate of technological development, time is of the essence to us. …
Truphone is currently in the Beta stage of its launch phase which involves only providing the service to a select group of customers and not opening the service to the general public. … we have been ready to move to the next step, a formal launch of the service to the general public, since 12 June 2007 but we are being prevented from doing so because of T-Mobile. …
It is imperative that Truphone be permitted to launch immediately otherwise we would lose our key advantage in being one of the first VoIP services available to customers in the telecommunications sector. Unless T-Mobile routes our numbers and permits Truphone to launch then others will take the market including T-Mobile which have themselves invested in VoIP services. … We have already lost some 6 weeks in trying to negotiate with T-Mobile (negotiation being very much encouraged as a matter of course by Ofcom) …."
"Truphone … uses [VoIP] technology to allow consumers to make low cost phone calls, using a new type of mobile phone that has just been released onto the market. Calls are made on these new handsets using the Internet to carry the call. Truphone's main way to make these calls is by connecting the phone to a Wireless – "Wi-Fi" … access point … These Wi-Fi points are themselves connected to the Internet which in turn is connected to Truphone's servers situated in London Docklands. From these servers Truphone either connects directly to another Truphone customer or, if the recipient of the call is not another Truphone customer, places a traditional telephone call into the Public Switched Telephone Network ("PSTN") either to a fixed line or to a Mobile phone. If you wish to make a call to, or return a call from, a Truphone user you would do this in just the same way that you would make a call to any other mobile network."
A serious issue to be tried?
"… there is a very close substitute available for the product offered by Truphone; calling a Truphone customer on their MNO/MVNO number is a very close substitute for calling a Truphone customer on their Truphone number. This means that these two products should be considered as part of the same relevant market because if one significantly raised the price for one service, consumers would simply swap to the other. The market definition question thus comes down to whether T-Mobile can profitably raise prices for outbound calls to Truphone customers above the competitive level.
The 'market for the activation on T-Mobile's network of another Communication Provider's properly allocated numbers' is not an economically meaningful relevant market for the purposes of this case. The product that is provided as a result of the activation of this number range is the ability for a T-Mobile customer to call a Truphone number. However, there is a very close substitute for this product: the ability for a T-Mobile customer to call a Truphone customer using the Truphone customer's MNO/MVNO number. This latter product is part of the mobile call origination market and in my view this is the relevant market for considering the economic issues raised in the present case."
a. The decision of the Director of the Office of Telecommunications (Oftel) in a Final Explanatory Statement and Notification dated 3 October 2003 (see paragraph 2.8) that:
"… in the market for wholesale access and call origination on public mobile telephone networks in the United Kingdom:
- no undertaking has [Significant Market Power], either individually or in combination with one or more other undertakings"
b. Ofcom's decision, in a Statement dated 13 September 2006 on "End-to-end connectivity" (meaning the process of enabling retail customers to make calls to customers or services on the same network or other providers' networks), that a proposed access-related condition to ensure end-to-end connectivity should apply solely to BT (see paragraph 1.7).
"… the process of enabling retail customers to make calls to other customers or services on the same network or other providers' networks … is important for both competition generally and end-users individually. Competing communications providers need to be able to interconnect with other networks in order to provide a full service to their customers. Customers expect to be able to call every other retail customer irrespective of the network to which the called party is connected."
The adequacy of damages as a remedy
"If you attempt to call a Truphone number [from a telephone on T-Mobile's network] you get a recorded message stating 'You have dialled an incorrect number, please check your number and dial again.' … The number is not 'incorrect' – it is the correct number but is just not being routed by T-Mobile. So, however many times you try to dial, it will never work."
The ability of a Truphone customer to make a return call efficiently may also be compromised, adding to the risk of customers being deterred.
The balance of convenience
"(57) Even where the operator of an essential facility is required to provide access of non-discriminatory terms, interim measures to enable a new competitor to enter a market require stronger justification than measures maintaining the establishment of an already existing competitor.(58) Where an undertaking is denied the opportunity to provide a new product or service to a market and that opportunity is likely to diminish considerably in value in the absence of interim measures, there is sufficient urgency to justify interim measures if the other conditions for granting them are met.
(59) Otherwise, a final Commission decision prohibiting an abuse of a dominant position which hindered the "growth of competition" would be rendered "ineffectual or even illusory"."
"A high degree of assurance"?
"Thirdly, it is legitimate, where a mandatory injunction is sought, to consider whether the court does feel a high degree of assurance that the plaintiff will be able to establish this right at a trial. That is because the greater the degree of assurance the plaintiff will ultimately establish his right, the less will be the risk of injustice if the injunction is granted.
But, finally, even where the court is unable to feel any high degree of assurance that the plaintiff will establish his right, there may still be circumstances in which it is appropriate to grant a mandatory injunction at an interlocutory stage. Those circumstances will exist where the risk of injustice if this injunction is refused sufficiently outweigh the risk of injustice if it is granted."
Delay and urgency
Inception of interim orders
Conclusions
"(1) The Respondent, by itself of its agents, on or before 0001 hrs Monday 23 July 2007 open the Applicant's number range (as allocated to the Applicant by the Office of Communications) on the Respondent's systems.
(2) In respect of the purchase by the Respondent of termination services from the Applicant, the Respondent will pay the Applicant the rates specified at paragraph 1 of the letter to the Applicant from the Respondent dated 13 June 2007 (Day: 0.3536 pence; Evening: 0.1619 pence; Weekend: 0.1275 pence), unless and until the Office of Communications or the Court hereafter determines otherwise."
Ofcom