A month on from the announcement of dingo blue's closure the telco's continuing mobile service looks set for an ongoing run amid speculation the provider is locked into a contract with Optus.

dingo blue spokesman Geoff Donohue said the company will cease supplying local call, long-distance and dial-up Internet access services at close of business, May 30 2002. However, the provider will continue to supply mobile services "until certain matters arising out of the acquisition of dingo blue have been resolved".

However, he would not confirm or deny claims the provider is locked into a contract with Optus.

Remaining staff at the provider were also left in the dark. Staff expressed feelings of uncertainty over their redundancy package in an internal meeting last week, as they were informed that the failed mobile and telephony provider will continue its mobile service indefinitely.

A source close to the situation, who requested anonymity, told Computerworld that COO Graeme Horne was reticent on the reason for continuing the service in the face of questioning from staff in an internal meeting.

"People in the meeting speculated as to why we are continuing with the mobile product. When asked whether it is because we are locked into a contract with Optus, Graeme Horne didn't deny it and he decided on 'no comment'. When asked why we are continuing with the mobile product he went with 'no comment' again," the source said.

"We have been promised that everything has been done in our best interest, but now it's even more uncertain when we will be made redundant, making it much harder for job hunting and generally making the mood even more sombre," the source added.

A statement on the dingo blue Web site reads: "In a short time, we will be in a position to connect new mobile services to your account as we have done in the past. We will notify our customers when this facility is restored."

dingo blue was established by Optus in 1999 as a specialist telephone and Internet retailer. The company was acquired by the Australian Gas Light Company (AGL) in December 2000, which announced last month it would close dingo blue in a cost saving exercise.