PennyTel, Newest Hit in Australian MVNO Field, Starts Liquidation

By Steve Anderson
Contributing TMCnet Writer

PennyTel, a mobile reseller and VoIP provider, took a hit last week, kicking off the processes of liquidation. This represents what looks to be another hit to the mobile virtual network operator (MNVO) market in Australia, and potentially may go quite a bit deeper than anyone suspected.

With PennyTel going into liquidation, it bears a similar fate to another company, Hi-Tech Telecom, which likewise entered liquidation, at last report, back in June. Reports have also emerged that suggest PennyTel may have had closer ties to Hi-Tech Telecom than some may have expected, with PennyTel alleged to have received fraudulent payments from Hi-Tech Telecom, reportedly around $3.9 million Australian (around $3.74 million U.S.). Though at last report, these were still just allegations.

Reports suggest that the New South Wales Supreme Court actually went so far as to grant both search orders and freezing orders on Hi-Tech Telecom back in June, when its director, Amadu Yahaya, was said to have transferred the $3.9 million Australian in question to PennyTel, as well as an additional $1.2 million Australian to Ivoisys. Yahaya reportedly served as the sole director of both PennyTel and Ivoisys until March 2013. Perhaps more unsettling is that no documents were found that provided reasons for said payments, leading Justice James Stevenson to offer a judgment in which he said: “On the face of it, at least as the evidence currently stands, the payments that Mr. Yahaya evidently caused to be made to Ivoisys and PennyTel are payments which have been made for no consideration.” Stevenson reportedly further said that the payments appeared to be a fraud, and that Ivoisys and PennyTel were ordered to repay the money back to Hi-Tech Telecom.

The exact impact of this development on PennyTel customers, meanwhile, seems somewhat unclear at this stage, though it is known that PennyTel customers are reporting that topping off accounts currently seems to be impossible, which may affect service down the line. PennyTel offers its services, at last report, via the Vodafone (News - Alert) network, which seems to be only minimally impacted as a result of the PennyTel affair.

Long-term effects of this affair, sadly, are unknown at this time. The whole affair still seems to be in its earliest stages, so a court of law will have to get to the bottom of the whole thing. It's likely to mean a mess for PennyTel customers in the short term, if nothing else, and a significant opportunity for other firms. But with MVNOs in Australia seemingly having some trouble, it may be that the entire concept is shaky, or the market is simply reaching a point where the strongest firms will be all that remains, a decent development overall for customers.

Still, as valuable as the VoIP market overall is, customers aren't likely to go without for any length of time. It's only time, however, that will ultimately tell just where this all goes, and from the look of it, it's going to take quite a bit of time before the entire mess is completely settled.

Edited by Stefania Viscusi