Optus threatens customers over VoIP calls

Optus customers received an SMS informing them that calling certain Australian mobile numbers would now be charged at international rates.

“All calls that re-route or divert to international numbers are charged at 29c per min + 27c flagfall” the text message read.

This came as a surprise to customers on ‘yes’ Timeless or Optus Cap plans which are advertised as including “unlimited Standard voice calls to any network within Australia – local national and GSM mobiles”.

To any reasonable person this would have included VoIP and calling card services that use a mobile or PSTN number as a dial-in point before connecting the call to the overseas party.

However Optus claims a clause in its lengthy “standard form of agreement” allows them to levy these new fees. The SFOA is not provided to customers when they sign up but customers are forced to sign that they agree with it sight-unseen when they sign up with Optus.  It states in Clause 5.1(a) “We will charge you for calls made to international destinations […] at Optus’ international rates…”

Given major telcos like Optus have failed to pass on the vast cost savings in international calling in recent years due to VoIP many customers have taken advantage of more competitive rates from calling card companies or VoIP providers such as freedomcalls.com.au comfortcalls.com.au or smartcalling.com.au which offer international VoIP calls for free.

To use these services people dial a local PSTN or mobile number from their phone and then once connected dial in the number they want to call overseas and the VoIP provider connects them.

The point is Optus’ involvement in carrying the call ends once the call is terminated at the Australian PSTN or mobile number. Optus does not have to carry the call to the overseas destination and therefore incurs no international carriage cost in doing so.

It seems that Optus is becoming increasingly irritated that its customers can use these VoIP services (or any other calling card style carrier) to make considerably cheaper or (in some cases) free international calls rather than paying Optus’s more expensive rates. So Optus has attempted to put a stop to this practice.

Customers who signed up in good faith to a ‘yes’ Timeless or Optus Cap plans have suddenly found that a call to certain mobile numbers are not covered under their plan and they will be hit with higher rates if they can even get through at all.

Nizi Bhandari the CEO of freedomcalls.com.au was furious to find his company’s VoIP access number affected by Optus. Bhandari explains that his business relies on customers ringing a standard Australian mobile number 0424 215 152 which then allows them to be connected to up to 70 countries at no charge above the normal rate they paid Optus to call a mobile.

Many of Bhandari’s customers signed up with Optus for up to 2 years on an unlimited cap plan believing that they call any mobile number untimed. “When some of my customers on the Optus network try to call my company’s access number they simply get disconnected. The number is blocked.”

To demonstrate Bhandari attempted to call his own service from a TPG mobile (which also uses the Optus network) and received the following announcement. “This service is currently unable from the Optus network including TPG and Virgin mobile networks. If you want to access this service please use Telstra 3 or Vodafone networks.” (We understand from Hari Menta from comfortcalls.com.au that the VoIP providers rather than Optus have disabled access to these number from Optus subscribers so their clients are not hit with international rates.)

Bhandari observed that “up to 50% of our traffic was from Optus users and I have noticed that from Christmas Eve [when the SMS was sent] around 50% of my incoming traffic has also dropped. This has been very disappointing for my customers since they could not call their families overseas over the holiday period.”

An Optus spokesperson maintains that international calls have always been charged for as part of these plans and refused to comment on whether the calls to an mobile which is being diverted overseas cost Optus any more than carrying an ordinary call to an Australian mobile number.

The spokesperson merely directed APC to the Optus website which states: “Optus is concerned that some customers may be being misinformed or misled by non-Optus related entities that are making claims that Optus customers can make free or included cap value international calls on their Optus Plan. This is not correct. International calls within the meaning of your Optus Mobile Standard Form of Agreement for all Timeless and Cap plans includes calls that re-route or divert to international numbers.

Under Optus’ twisted definition a mobile call isn’t a mobile call even if it terminates in Australia but then diverts somewhere else and Optus misses out on profit it would like to earn.

Meanwhile Optus customers may receive their latest bill only to discover that calls they thought were free are being charged at 29c per minute plus 27c flagfall.

In APC’s tests we were still able to successfully connect to these free VoIP services using a post-paid Telstra mobile and an Optus landline service and readers have reported that 3 and Vodafone are not charging their customers a premium to access these regular mobile numbers.

Optus accused of breaching network neutrality principles

Telecommunications expert Paul Budde says although not every customer may be affected by this particular change it shows a worrying new twist in the net neutrality debate — telcos watching what customers are doing on voice calls and changing billing terms on the fly to make it harder for people to save money.

“What we are seeing is that telcos such as Optus are trying to hang on for as long as possible for monopolistic charging structures. This is another element of the net neutrality issues that rages in the USA regarding access to certain websites” Budde says.

“[President Elect] Obama has promised to guarantee network neutrality (on the fixed networks). The argument for regulators to exclude mobile networks from such regulations is that there is sufficient competition and customers can move to another operator. We all know that this is not as easy as it sounds.

“In order to maintain monopolistic structures you make the billing system as complex as possible so that hardly anybody can understand how it works. It is all borderline stuff and very hard for regulators to get a grip on.” Budde said.

Budde warns that Optus is adopting tactics used in Europe by some telcos and that it may not be easy to prosecute them.

“European examples have shown that it is very hard to prove that these activities are illegal. Intuitively we know that what they are doing is not correct — people would ‘feel’ this is unjust; something against what they would see as ‘common law’. In the end the European Union had to use new regulations to circumvent these interconnect (termination) problems after five years of haggling” he said.

“The only solution may be to use people power and show operators that you don’t accept such practices in the hope of shaming the company into changing these practices.”

False and misleading advertising?

Optus may fall on its own sword if enough consumers complain to authorities however. Advertising standards require companies to make exclusions and limitations clear to consumers in their advertising of a service. Companies cannot rely on fine print in contracts (especially if that fine print is not supplied at the time a consumer signs the contract) if it materially affects the value of an offer.

For example the Department of Fair Trading NSW says: “A material fact is a fact that would be important to a reasonable person in deciding whether or not to proceed with a particular transaction.”

Advertising standards regulators put heavy weight on the ‘reasonable person’ test: “what would this advertisement lead an average reasonable person to believe?”

If customers who signed up to Optus mobile capped and timeless plan contract based on Optus’ advertising claims that they would have unlimited calls to any GSM mobile number in Australia then discovered that they would be charged international rates to call a VoIP provider on a mobile number could complain that they have been misled by Optus’ advertising.

The fact that Optus felt it necessary to SMS customers on Christmas Day to warn them that calls to mobile numbers used by VoIP operators would be charged at international rates suggests Optus knows its mobile customers wouldn’t expect this.

Customers who believe they have been misled by Optus’ advertising of mobile plans can make a complaint to the Office of Fair Trading in their state as well as to the ACCC which prosecutes misleading advertising.

As well as complaining to a statutory body customers could also file a complaint with the telecommunications industry ombudsman which will attempt to resolve the complaint with Optus on your behalf. The complaint investigation fees are billed to Optus and the longer Optus puts off resolving the issue to the TIO’s satisfaction the higher the fees go.

Before complaining to a statutory body or the TIO you should first make a formal complaint to Optus as statutory bodies and the ombudsman will not investigate a complaint unless Optus is first given the opportunity to resolve the matter directly with the customer.

With additional reporting by Dan Warne.