Operators and manufacturers of GSM gateways have reacted angrily to a government decision to outlaw the use of the technology by third parties.
GSM gateways are devices which take a fixed-to-mobile call and present it directly to the network as a mobile call, rather than through BT's interconnect.
They are used mostly by business customers who have large numbers of calls going out to mobile numbers.
The Department for Trade and Industry has upheld the restriction on the "third party" use of the technology, although private users will still be able to exploit the 20% cost savings it can offer.
This effectively means corporates using the technology connected to their own PBX will be unaffected as they often own their own equipment so qualify as private users. But smaller companies who use third party provided services will not be allowed to continue doing so.
The Mobile Gateway Operators Association (MGOA) said the decision was "extraordinary" and would lead to the loss of a Â£300million industry and 800 jobs. It said its proposals to the DTI on how operators' concerns about security and service functionality could be met had been ignored.
Mobile operators have claimed that the gateways compromise security, emergency calls and because they hide CLI, mean users cannot user any CLI-related services, such as callback, or reject a call.
But one provider of GSM gateway equipment, Quescom, told Mobile Europe that operators' concerns had more to do with profit.
Teddy Theanne, UK country manager said, "GSM gateway suppliers are being penalised for providing a solution in response to an end-user demand whilst still complying with GSM standards.
"GSM gateways result in huge cost savings to end-users, with phone bills reduced by up to 50% and an average six month return on investment. It will take networks up to three years to be in a position to compete with this ROI.
"You can now appreciate why the network providers are finding GSM gateway suppliers a threat. All the hype that surrounds the GSM gateway is only a myth and it is clear it has little to do with legality and a lot to do with economics."
The MGOA has said it will take its concerns to Oftel, the European Commission and to the network operators themselves.