Digital marketing firm Impelus threatens to sue Telstra over direct carrier billing shutdown

An ASX-listed digital marketing firm has threatened Telstra with court action over its decision to cease providing direct carrier billing (DCB) services to all of its current customers.

Direct carrier billing is a service that allows mobile customers to purchase for content like mobile apps, game and entertainment over a mobile network, with the costs charged to their phone bill.

Telstra’s move to cease DCB or premium direct billing follows announcements made in August last year that the telco would crack down on unexpected additional charges on mobile phone plans by disallowing third-party content providers to include new subscription fees on customer phone bills.

Digital marketing firm Impelus, a Telstra direct carrier billing services partner, last week said it had been told by Telstra that the telco would cease providing DCB services as of 2 March to all of its DCB partners including Impelus. Impelus, however, argues the telco has a continued obligation to provide DCB services after that time.

“While, as previously announced, Impelus has classified its DCB operations as non-core (and has been reducing costs in that area of its operations and focusing on its existing and profitable technology-led digital performance marketing business), premature withdrawal of the services in March 2018 would have a material impact on Impelus' FY2018 revenue and earnings before interest and tax (EBITDA),” the company wrote in an announcement to the ASX last week.

In an updated statement, Impelus said its attempts to resolve the issue with Telstra had failed, and that it intended to initiate proceedings in the NSW Supreme Court to block Telstra from ceasing its provision of DCB services. The marketing company estimates the cease of DCB services will impact its 2018 financial results to the tune of $550,000 to $680,000 in lost EBITDA.

"The company is extremely disappointed with Telstra's decision after having shared such a long and successful relationship in DCB for more than four years," Impelus wrote in an ASX release today.

A Telstra spokesperson said: “Telstra has made the decision to exit premium direct billing (PDB) services with a focus to improve the customer experience. Telstra disagrees with the assertion that we are not entitled to exit the PDB service as Impelus suggests and we intend to strongly defend any proceedings.”