Dear Kogan Mobile Customers,
Important update concerning the continuity of your Kogan Mobile Service
As a challenger brand, we’re used to being up against some of the
biggest companies in the world to get the best deal for our customers.
We’ve successfully disrupted entire industries, with our low margin,
high volume technology business.
While the launch of Kogan Mobile was a success for consumers, securing a
great deal on mobile access at an unbeatable price, not everyone in the
industry was happy about it.
We have fought hard for the Australian consumer, spending countless
hours and millions of dollars in legal and administrative costs to
defend your right to a fair deal! Our intention from day one was to
build a long-term, sustainable, and value-based alternative to the big
telcos. We believe technology makes the world a better place, which is
why we have fought hard for better value mobile deals for everyone in
Australia. The endless negotiations, and even the occasional visit to
the Supreme Court to protect your interests and ensure that you continue
to get the best deal have worked, until today.
There are forces at play in the Australian telecommunications market
that are beyond our control, very powerful, and impossible to ignore.
When over 100,000 people took their services to Kogan Mobile, in such a
short space of time, it attracted a lot of attention. Unfortunately and
frustratingly, it appears like the telco heavyweights may be determined
to take their former customers back and they may be prepared to do so by
force.
We believe that fair and open competition is great for consumers, but
unfortunately that competition is being forcefully limited today.
In our email last week, we advised that Kogan Mobile had recently become
aware of the following -
Telstra is in dispute with ispONE, Telstra’s sole distributor of
prepaid 3G mobile services and Kogan Mobile’s essential supplier
Telstra had taken steps to terminate its contract with ispONE. If
Telstra terminates its contract with ispONE, this would be very likely
to impact Kogan Mobile’s own customers’ services (through no fault of
Kogan Mobile)
ispONE had commenced proceedings against Telstra in the Federal
Court and obtained a short term injunction to restrain Telstra from
terminating its contract with ispONE
The Federal Court ordered Telstra and ispONE to attend mediation.
Although not party to the Federal Court proceedings, Kogan Mobile was
permitted to (and did) attend the mediation
We now understand the mediation between Telstra and ispONE failed to
achieve a satisfactory result for Telstra. Telstra has today notified
Kogan Mobile that it will be terminating the supply of 3G Prepaid Mobile
services to its wholesale reseller ispONE within 24 hours, and has
established a transition arrangement in respect of your service. Kogan
Mobile understands that ispONE has appointed voluntary administrators today.
Kogan Mobile has tried to do everything it can to protect its customers.
However, contrary to our numerous and concerted efforts to persuade
Telstra to maintain and support Kogan Mobile's arrangements with
Telstra's sole distributor, ispONE, Telstra has advised that it will
terminate the 3G Prepaid Mobile services to Kogan Mobile. This will
impact the continuity of your service, and those of other Kogan Mobile
customers. While the timing and nature of the transition arrangements
are dictated by Telstra, Kogan Mobile has negotiated the optimal
arrangements that Telstra would allow.
While this matter is entirely out of the control of Kogan Mobile, we
nevertheless sincerely apologise for any inconvenience that these
transition arrangements may cause to you. Importantly, Kogan Mobile
customers who have remaining credit at the time their services are
terminated by Telstra will have their entire remaining balance refunded
to them by Kogan Mobile. The refund amount shall be calculated as the
pro-rata amount remaining on the date of deactivation of service.
We’re Devastated
We are extremely upset to have to bring you this news. We set out with
the aim to make mobile services in Australia more affordable for all,
and were well on the way to achieving this goal. The migration to Kogan
Mobile was one of the biggest in Australian telecommunication history.
As we lowered the prices for services, we were happy and so were our
customers - but not everybody in the industry was pleased with what we
were doing.
As you may have seen recently, many companies have fallen out of the
prepaid unlimited market. We’re afraid that due to certain industry
dynamics, this is a sign of things to come. We’re concerned that it
won’t be long before your choice as a consumer is eroded almost
completely. We worry that the big telcos in Australia will continue
their consolidation of power. Inevitably, this will mean higher prices.
We’re not happy about this but at this stage it’s not something we can
do anything about. Kogan Mobile has been muscled out of the mobile
industry against our will by a force much bigger and much stronger than us.
What will happen to my mobile number?
Don’t worry, your number is safe! Your mobile number will stay active
for 180 days from today. You will be able to transfer (port) your phone
number to another provider at any time for the next 180 days.
What does this mean?
Based on information provided to us by Telstra, we understand that the
following will be the transition arrangements that Telstra will enforce -
Within the next 24 hours, Kogan Mobile customers will be unable to
activate new services, or recharge existing services
In the coming weeks, you can expect to receive an SMS from Telstra
advising you that your service will cease within a limited period (up to
60 days), but not before you receive a second SMS advising that there
are 7 days to change (port) your number to an alternate provider
During this period, you will be able to use your existing service
and consume your existing credit
Telstra will then send a second SMS at some stage during the 60 day
transition period, which will advise that there are 20 minutes of calls
and 20 SMS remaining credit available for use within 7 days to
Australian numbers, while data services, international calls,
international SMS and MMS will be excluded. You will continue to be able
to retrieve your voicemail messages during this 7 Day Plan and for up to
10 days afterwards.
For 180 days from today, customers will still be able to receive
calls, receive SMS and transfer (port) their mobile numbers and make
emergency calls at any time for 6 months thereafter. If your service has
not ported out after the 6 month period, the service will be cancelled
by Telstra
Kogan Mobile recommends that, upon receiving the second SMS from
Telstra, you take action to transfer (port) your mobile number to
another provider, or otherwise make arrangements for continuity of your
mobile service. We also encourage customers to plan ahead for receipt of
the second SMS from Telstra by acquiring a new SIM card from another
provider as soon as possible.
On behalf of our customers, we are currently seeking to negotiate
some deals with several leading mobile phone providers. We will keep you
informed about any special offers we manage to negotiate on your behalf
and which you may wish to take up.
What will happen to the unused credit I've paid for?
Once you have ported your number to another provider, or your service
otherwise ceases, Kogan Mobile will, of course, refund to you the unused
portion of your Access Period back to the credit card or Paypal account
that you originally paid with.
As a consequence of Telstra’s termination of the 3G Prepaid Mobile
services, the Kogan Mobile customer service team is likely to be
inundated with calls and emails, and is likely to take longer than
normal to respond. We will provide further email updates to answer your
most common questions, and will provide you with further information as
it comes to hand.
If you have an urgent enquiry, please email
[email protected] and
we will respond as quickly as we can.
Thank you for your patience and understanding.
For ease of reference, this is a copy of the email we sent you on
Tuesday 13th August:
Thank you for joining us on the journey to make mobile access in
Australia more affordable. We entered the mobile industry in order to
increase competition and give consumers more choice and better value.
Since starting Kogan Mobile, we are proud to now serve more than 115,000
active customers.
We have fought hard for the Australian consumer – there have been
endless negotiations and even the occasional visit to the Supreme Court
to protect our customers’ interests and ensure that our customers
continue to get the best deals. However, there are forces at play in the
Australian telecommunications market that are beyond our control, very
powerful and impossible to ignore.
You may be aware that we procure our mobile services for part of the
Telstra 3G Network through Telstra’s sole and approved distributor –
ispONE. ispONE is the only company in Australia that wholesales
Telstra’s Prepaid 3G Services and is essential to the operation of our
and any business through that network. Telstra’s Prepaid 3G Network is
not integrated with any other wholesale platform, other than ispONE’s.
Since day one, Kogan Mobile has complied with all its obligations to its
service providers. We keep our agreements. We have paid every invoice on
time or early. Like our customers, we expect our service providers to
deliver what they have been paid for.
Kogan Mobile has recently become aware of the following -
Telstra is in dispute with ispONE, Telstra’s sole distributor of
prepaid 3G mobile services and Kogan Mobile’s essential supplier
Telstra has taken steps to terminate its contract with ispONE. If
Telstra terminates its contract with ispONE this is very likely to
impact Kogan Mobile’s own customers’ services (through no fault of Kogan
Mobile)
ispONE has commenced proceedings against Telstra in the Federal
Court and obtained a short term injunction to restrain Telstra from
terminating its contract with ispONE
The Federal Court ordered Telstra and ispONE to attend mediation.
Although not party to the Federal Court proceedings, Kogan Mobile is
permitted to (and will) attend the mediation
Kogan Mobile is doing everything it can to protect its customers.
We are monitoring these developments closely, as they may affect the
continuity of our prepaid mobile services. We will provide a further
update when further information comes to hand.
You may also wish to contact Telstra directly and ask Telstra what it
intends to do in respect of its wholesale prepaid mobile business and
customers’ mobile telephone services if it achieves its goal of
terminating its contractual arrangements with ispONE.
Kindest regards,
Kogan Mobile
