Mobile phone users in Jersey who switch from Jersey Telecom (JT) face losing their numbers.
JT has pulled out of talks with Cable and Wireless on transferring mobile phone numbers, saying that switching numbers costs too much.
The island's competition authority (JCRA) rejected the complaints, saying that the costs of transfer were lower than expected.
JT now faces formal action in the courts by the JCRA.
JT has been in talks with other mobile provider Cable and Wireless since June with the aim of offering the phone number switching service from January next year.
But it said in a statement on Tuesday that a Channel Islands-wide solution would be more economical.
"It is clear the company's very real concerns about cost and method are being ignored and the Board has come to the view that it has no option other than to withdraw from the process."
Bill Brown, head of the JCRA, said that if JT failed to comply it could be prosecuted for contempt of court.
He said: "We disagree totally that JT's concerns are being ignored.
"The tenders are in and the costs are actually lower than we expected."