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Interactive Telecoms to enter liquidation after Telstra commission wrangle

Interactive Telecoms to enter liquidation after Telstra commission wrangle

Investigations into the company's failure are ongoing

Telstra reseller, Interactive Telecoms, is likely to enter into liquidation today, following the closure of the business in early August.

The company’s joint administrator, Ian Purchas, told ARN that Telstra withheld a "significant payment" after terminating its licensing agreement with the reseller.

The New South Wales-based company entered into voluntary administration on 2 August and ceased trading on 4 August, immediately after Telstra terminated its licensing agreement with the company.

According to Purchas, investigations into the company’s failure are ongoing, but it is unlikely that unsecured creditors will see any return, although former employees might receive some return on what is owed to them.

Purchas and Jason Porter of SV Partners were appointed administrators on 2 August.

During the first meeting of creditors, held on 15 August, it was revealed that the administrators have written to Telstra requiring the payment of outstanding invoices.

As previously reported by ARN, Interactive Telecoms went into administration due to financial difficulties arising from ongoing changes in the way Telstra structures its commissions for licensed retailers.

Former business development manager, Andrew Wulff, told ARN that the changes to the commission structure, which sees the telco remunerate licensed retailers for products and solutions sold under the Telstra banner, that were implemented by Telstra were allegedly poorly communicated to its partner.

Wulff claimed that the changes to the commission system reached a point where the company would be expecting to get paid close to $100,000 and actually get from $5,000 down to a negative balance.

Telstra then allegedly started working to claw back and withhold commissions for sales that had previously been paid or included in remittance advices, Wulff claimed.

According to Wulff, Interactive Telecoms tried to reason with the telco but was allegedly given no other option than taking legal action, which would have incurred high costs for the 10-employee company.

During the creditors' meeting, one creditor raised the point that the company was allegedly trading insolvent, to which administrators said investigations were underway and invited creditors to provide any further information that would assist the investigations.

The company's former director has declined to comment on the matter.

The administrators are yet to reveal the total amount owed to creditors. However, representatives from Global Tel and AC3 were among the creditors present at the creditors' meeting in August.

A second meeting is expected to take place on 7 September.

While Telstra declined to comment on this specific matter and the claims made by Wulff, a spokesperson for the company told ARN that, "partners remain a strategic priority for Telstra Enterprise and play an important role in growing the way we serve our customers".

“Our relationships with partners are built on shared values and a desire to provide great experiences for our customers,” the spokesperson said.

The liquidation comes after another Telstra licensing partner, Vita Group (ASX:VTG), renegotiated its Master License Agreement with Telstra, striking a new deal that sees it forego some remuneration factors in exchange for a greater store presence.

Just months earlier, Vita Group halted all plans to expand the number of Telstra stores in its network while it negotiated with Telstra over remuneration and commercial terms. 

Telstra and Vita Group agreed to some remuneration reductions agreed between December and February, as part of a response to margin pressures faced by the telco in a “very” competitive mobility market, as well as the ongoing rollout of the National Broadband Network (NBN), the company said.

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Tags TelstralicensingliquidationpartnerInteractive Telecoms

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