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TeleChoice Sues Optus For $110M After Reseller Split

In what has become an ongoing saga for more than 5 years, former Optus reseller TeleChoice has resorted to suing the Singapore owned carrier Optus for $100M in an effort to “get justice”. It’s also claimed that the carrier manipulated their systems to the disadvantage of TeleChoice.

$98 million of the claim relates to an offer TelChoice was considering becoming a Telstra dealer at the end of its Optus agreement in 2008.

In a claim filed in the Victorian Supreme Court TeleChoice is seeking damages for alleged breach of contract, allegedly inducing breach of contract, and pursuant to Australian Consumer Law and the Trade Practices Act.

TeleChoice claims that Optus said it would match Telstra’s offer “dollar for dollar”, ultimately leading TeleChoice not to sign the deal with Telstra, shortly afterwards things started to go pear shaped for the reseller.

Part of the Telstra offer included an option that allowed customers to finance at zero interest the cost of their chosen handset and accessories as part of their mobile service plan, which was worth $160 per connection to TeleChoice.

This option was omitted by Optus, which TeleChoice claims caused it to earn close to $100 million less than they would if they had signed up with Telstra, they also claim that Optus failed to pay commission that was owed by the big carrier.

Court documents filed by the former Optus reseller allege it received an anonymous tip-off by post in November 2012 that Optus was changing the codes in its systems from those that linked customers with distributors to those linking customers to Optus.

TeleChoice claims it was induced to believe it could meet its targets, but that it was unable to do so due to the termination of the agreement between the companies.

It was given notice in September 2012 that its agreement with Optus would end by March 31, 2013.

It’s understood the company had to undergo a significant restructure in its core business as a result of the split from Optus.

It claims it asked Optus to keep the decision private, telling the telco that when the decision became public it would put TeleChoice at risk of collapsing, that suppliers would not keep working with the company, franchisees would stop paying and creditors might try to wind it up.

TeleChoice alleges Optus discussed the termination with media organisations, which “had a material impact on its ability to meet targets” and, by making it seem as though TeleChoice would achieve its targets, Optus engaged in “misleading or deceptive conduct”.

Among the other matters alleged in the statement of claim include a failure to pay a $550,000 final branding fee, not supplying TeleChoice with phone handsets it had pre-ordered, and compensation for unsold stock.