Kogan Comes Clean On Mobile Customer Dumping, Optus Offers Deal To Jump Ship

Kogan Mobile has released an official response about its impending demise that explains what will happen to customers' remaining credit. Meanwhile, rival telco Optus has seized the opportunity to rescue Kogan's customers from the wilderness with a 'special' deal.

Earlier today, we reported on Telstra's decision to dump all Kogan Mobile customers as it progressively makes plans to cancel services on the discount MVNO. Kogan Mobile has since released a detailed statement expressing its "devastation" and explaining what lies ahead for existing customers.

MORE:Five Lessons To Learn From The Collapse Of ispONE And Kogan Mobile

Here is the lengthy response in full (we've emphasised the more useful sections in bold):


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.

Optus also released a statement this afternoon offering Kogan and Aldi customers a 'special' prepaid offer if they transfered their number to Optus.

From 5pm today, people who transfer their number to Optus Prepaid can get a special deal. Sign up to Optus Prepaid Social 4G and on your first three recharges of $30 or more, we’ll give you double the data and double the standard talk in Australia.

To get the above deal, customers need to transfer their number by 30 September which gives you roughly one month to get your act together.

Optus also provides the following mobile phone porting tips:

  • To transfer your number, you need to swap your current SIM with an Optus one
  • You can get a SIM at your local ‘yes’ Optus store^, on the Optus website or from anywhere that sells Optus Prepaid (available at over 9,000 retailers across Australia)
  • The friendly people at any ‘yes’ Optus store can help you port your number or you can do it yourself at optus.com.au/activate
  • Make sure you give us your correct mobile number and date of birth so we can get the details right
  • Remember, porting can take up to four hours so please be patient, but hopefully it will be a lot quicker
  • You can bring any phone that’s compatible with the Optus network, whether it’s 3G or 4G ready

Well, it's certainly been an interesting day for telecommunications in Australia. We'll keep you posted with any new developments as we get them. In the meantime, Kogan Mobile customers may want to read our guide on what to do when your prepaid mobile operator shuts up shop.


Comments

    Disgrace! I am with Kogan Mobile .. Who cares if Telstra Disconnects, Telstra should honour its customers because ultimately we are on Telstra's 3G network. Careless rats with no indication of generosity yet only greed and selfishness! .. Selfish! Telstra's net profit per year is so high, yet its treating its customers on its network (no matter how external or third party it maybe) like dirt.. Not Good enough and be rest assured any words that come from me will be on the negative on Telstra!

      -sorry, didn't mean to reply.

      Last edited 19/08/13 9:31 pm

      Im a Telstra customer as well. But I actually pay them, not some third party. And you know what? My service is fine.

        Yeah sure Teltra Staff.

          Err no. I was forced to switch from Vodafone back in 2008 when i moved to remote northern territory for work. Have never looked back

      Whether you like it or not, you are not a Telstra customer. You are with Kogan Mobile...

      I think you need to "take a leaf out of this book" and read this

      http://www.lifehacker.com.au/2013/08/how-your-biased-brain-makes-you-a-jerk-online-and-how-to-stop-it/

      1. You aren't Telstra customer. Kogan isn't Telstra customer. Kogan is ISPOne's customer and you are Kogan's customer.
      2.Telstra disconnects ispOne, because ispOne terminated its contract with Telstra. "Telstra wholesale has been advised that ispONE has appointed Ferrier Hodgson as a voluntary administrator and the administrator has cancelled ispONE's contracts for the supply of Telstra".
      3. ispONE has debts of around $30 million, according to administrator Ferrier Hodgson, with Telstra the biggest creditor.
      4. Kogan didn't build any network infrastructure. ispONE ressels Telstra services to Kogan. So Kogan's customers used Telstra services via third party company.

      p.s And Telstra doesn't forget about "Telstra customers", even if they are in fact Kogan's customers. ispOne terminated the contract, but Telstra: "An interim service will be available for a fixed period of time for people who have active pre-paid mobile services from Kogan Mobile so they have time to choose their next steps". What about ispOne, have they done anything ?

      ispONE didn't pay their debts.

      You can't complain that Telstra should've kept propping them up and providing to ispONE just because they had customers who rely on them, just the same way you can't complain to the power company that they can't cut off the power bill you haven't paid all year, just because you have children.

      At some point you have to pay your fucking bills.

    dear Chris Jager. Sad to hear that Kogan has been squashed by a larger Telco even though from what i read it was not all Kogans fault. I want to ask a question Aldi uses Median mobile "Telstra has entered into a interim agreement"??? does this mean that Aldi mobiles will be the next to get squashed by the large telco and is it just time . Yes i was a Kogan customer time to move over more than likely Optus . I worked with telstra for many years and never trusted them and still dont
    Kind regards steve collins

      Aldi Mobile are serviced by a company called Medion Australia, who have negotiated direct access to Telstra. Therefore Aldi Mobile customers are fine.

      It does beg the question of why Kogan couldn't switch to Medion, and how they can say "ispONE, Telstra’s sole distributor of prepaid 3G" - when obviously Medion is (now) an alternative to ispONE.

    Optus is a pretty shit alternative
    After your 3 month period ends you're on the standard plan and that's a massive drop in quality from what you had with Kogan on the same price:
    - 250 minutes a moth for calls
    - 500 MB of data
    - 28 day expiry
    - less coverage.

    It's like some sort of childish joke.

    The good thing about Red Bull and Kogan was that they provided the sorts of prices and service you'd get in other countries, specifically the USA. Whereas the Telstra, Optus, Vodphone etc are still on the same old Australia Tax third world setup we always suffer from in this country.
    We'll never move ahead when we have this sort of petty profiteering strangling what users are able to do with communication tech. No wonder Turnbuls's plebeian vision for the NBN is winning people over

      Don't know what you're used to but in the USA, there's no such thing as BYO discount outside of T-Mobile's new plans. AT&T and Verizon are expensive, their phones are not interoperable due to CDMA, and their hidden costs will make your eyes bleed. That's why hardly anyone buys phones outright over there, the plans cost more-or-less the same, regardless if you have a phone or not.

      Last edited 19/08/13 11:21 pm

      I've switched my wife to Woolworth prepaid last night, it's quite fast to switch, the plan is quite cheap too $29 you will get $250 to Optus network and $250 to other network (she doesn't call much) and 5GB of data and it last for 45 days. But ..... It's on freaken OPTUS network.

      We give this a try to see how it goes, as we get another 10% discount for using the everyday reward card to top up. but signal is so bad compare to KOGAN one.

      Or we can switch back to ALDI.

      Last edited 20/08/13 9:40 am

    It is a Disgrace, I too am with Kogan Mobile and was very happy with the service, but I knew in this greedy telco monopoly of Australia it wasn't going to last, I have just browsed around the offerings of the other big telcos to replace my Kogan service, and surprise, surprise, the equivalent service will cost 3 to 4 times more with them. This is the reason we have the highest cost of most services anywhere in the world, because they can get away with their greedy practices because anyone that comes along and offers any competition or value for money, just gets snuffed out. Can't have these value for money newcomers coming in and upsetting the status quo. Not surprised our illustrious Government with all it's quasi modo departments that are supposed to keep big bully business in check, are being awfully quiet, it's just like the rubbish fuel and power prices we are forced to pay to line these sob's pockets.

    Last edited 19/08/13 9:35 pm

    Hey, you should all check out Yatango Mobile. The proposition is great as they focus on getting you to pay for what you need and allow you to build a plan that meets your usage needs. No contracts or ongoing commitments. There's a 30 day Free Trial offer going on at the moment. Runs on Optus. https://www.yatangomobile.com.au/freetrial/

      A lot more expensive than a place like vaya.net.au

      For similar plans
      Vaya - $650 calls, unlimited sms, 1.5gig data, unlimited calls to other vaya phones
      yatango - $600 calls, 1000 sms, 1.5gig data, $600 of calls to other yatango phones

      $18 vs $47

      The only enticing thing about yatango really is that you can add 50mins of international calls for $5.

        Remember that Vaya charges data per MB (ie every data session you open on your phone, like e-mail and WhatsApp, will round up to the nearest MB). You won't get the full 1.5GB of data.

          As i recall the iPhone keeps the session open as much as possible anyway (for push notifications), i doubt any of my sessions ever use under 1meg. Granted i may not get all 1.5gig, but you can always go up one plan and still pay less than yatango. There could be someone that yatango suits but i doubt there would be many that would be better off unless that make a lot of international calls.

    Telstra are smart. They are monopolising stooges, but smart. They know that they have incomparable signal, and therefore, have control. I'm a heavy phone user for real phone calls (a strange thing for every other person of my age) so unlimited text does not appeal, I need data and calls. I am now going to have a job, get paid $6 an hour just to pay for my phone. Hooray.

    y cant kogan make the same deal with telstra that aldi did ??

    .....your first three recharges of $30 or more, we’ll give you double the data and double the standard talk in Australia .... yeh NO thanks optus !

      Optus are very good at doubling credit / data for your recharge because they know that their coverage sucks. "At Optus our coverage sucks, so to make it up to you we'll give you more credit and data for your money, which you cannot use because our coverage sucks"

    interesting his note makes no mention of the fact aldi mobile have been able to secure a deal with telstra, Russel is no doubt clever and driven but generally his marketing seems to be soap box stunts, if aldi found a way no doubt there is one and his lack of ability to secure it is a reflection on him more so than telstra given these are his customers.

      Perhaps Aldi dont have as many customers as Kogan, so Telstra wants more. Plus Telstra probably dislike Kogan's business model of stickin it to the big guys and are just not interested in making a deal with them so they offer an unreasonable deal.

      I would wager that the reason Aldi got the deal is their customer base uses less calls/data than the Kogan customer base.

      The Aldi service was more expensive initially, so the people who tend to exploit low cost plans to the max would have been more attracted to the Kogan service.

    Telstra is a publicly listed company, which means it's main purpose is to provide value to shareholders. It's doing a decent job of that right now.

    Pay the price and get the service you pay for

    I pay my funds directly to Telstra and don't have any issues with service

      What you clowns don't seem to understand here, is that "Telstra" just shut down an "Australian" mobile provider in Kogan, whilst continuing to support an overseas company in Aldi (Medion). That's right Kogan is Australian! Hello!!! Once again Australians get shafted for preference to a foreign owned company!!! Where's the national pride...?

    So much hate for Telstra.

    ispONE didn't pay their bills and went under, so Telstra Wholesale stops supplying service. What do you expect?
    If you don't pay your power bill or phone bill what happens?

    Been a customer 1 week paid for a full year disconnected today without a mobile no matter what I will never be a Telstra customer again think it a disgrace that people are held ransom by an ex government established telco By By Telstra from me... guess its back to amaysim ????

      Which bit of "You were a Kogan customer not a Telstra customer" is so confusing for some people? (And no, I'm not a Telstra customer.)

    As far as I am concerned, I have had a contract with Kogan for 1 year and they have not furfilled that contract and should be liable for any additional costs incurred, going to seek a legal advice and there should be a class action against Kogan

    Its not my fault that Ispone dod not pay Telstra, my contract is not with them its with Kogan and Kogan should be liable!!

      Wishing you the best of luck, but from my experience with the providers, the T&C that you agree to are the size of a phone book when actually printed (exaggeration, it's sometimes only half a dozen pages), and give them all sorts of outs on their side of the contract under 'reasonable circumstances'.

      The very important question is: What are you going to sue for, specifically? Service not provided? That doesn't have a dollar value. The cost of going to the next cheapest provider? Dubious legitimacy, but give it a shot.

      Best bet at this point would be lodge a request for credit (for whatever reason you can think of), get a dispute reference number, and if that's either rejected or takes too long to be responded to (about 10 days is normal), lodge a complaint with the TIO (telecommunications industry ombudsman).

      The TIO is very pro-consumer. If they ever turn you down, you never had a leg to stand on.

    How do we think Telstra got such great infrastructure? From the Australian taxpayer, as a formerly 100pct govt owned enterprise and now 50 pct public owned with no reward to the Australian people. In fact, they moved all of their tech support offshore and show absolute contempt for the Australian public. Lets be clear about what happened here - Telstra underestimated the groundswell of support for Kogan and they wanted to get back control of their wholesale network. So they put ispOne out of business and have an "interim" arrangement with Aldi, which they can exploit or terminate at their leisure. This is not competition or a fair go, yet the ACCC sits idly by. We should be ashamed about the lack of competitiveness in Australia and the ability of yet another govt propped up corporation to control the market.

      Telstra didn't terminate the contract, it was ispONE who did this. The Federal Court dismissed the Telstra's apeal against an injuction that stopped it from cancelling its contract qith ispONE. However, Ferrier Hodgson, ispONE administrator, immediatly cancelled the contract with Telstra Wholesale.

      Thing about Telstra paying for the infrastructure is that sure, the taxpayer paid for Telstra's infrastructure, but when Telstra was sold, so was the infrastructure. The taxpayers (technically, the government) got paid for that.

      If I build a house and sell it to you, that doesn't give me any claim to sleep there for free or cheap just because I built it. I got paid for it, my claim is over. Same goes for the taxpayer on Telstra's infrastructure. It's sold, our claim is over.

    It sends a pretty hard message to any MVNO in Australia. You're not as safe as you think you are.

    Telstra Sucks as a previous customer for approx. 20 years I have been ripped off by them so I went to Kogan what a great deal, But Telstra GREEDY Telstra has put an Australian company under so to support the Indian Companys who you cannot understand, so why can anyone understand Telstra you Suck Telstra and I will never come back even if I cannot get any coverage as my 4 kids have with Vodaphone they will not go back to Telstra, who we Aussies Built up for the Feds to sell off and did they give us anything . I don't think so.

    Regardless of who cancelled what ,and who owed who ,Telstra remain a ripoff ,just ask me..several years ago they attempted to bill me several hundred dollars for calls that i never made..when i called them i encountered the rudest prick of a customer service rep who didnt give a rats arse about my billing enquiry ...they as a company are smug,greedy and should not b allowed to dictate to the public control of the telco market.

    I had a 12 month contract with Kogan and am half way through it. I have now gone to Aldi and the switch only took 4 hours to be up and running. I now wonder how long it will take Kogan to credit my account for the remaining 6 months?

    I had been using kogan for about 2 months before the collapse, I bought the $299 package for 12 months. I have not yet changed providers, that is, I am stuck with a sim that does not function, and I have not received my two hundred or so dollars refund. Should I be concerned about not receiving my refund yet? There is no helpline for Kogan mobile so my adice is limited.

    Thanks,

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