Telstra: It's Not Our Fault Kogan Mobile Is Closing

It seems that Telstra has been copping some flak for the impending doom of Kogan Mobile. Telstra has taken to its blog with a vigorous defence, saying that it won't be blamed for the closure of the cut-price carrier.

The closure of Kogan Mobile was brought about by the collapse of wholesaler ispONE earlier this week. After losing a court battle with Telstra surrounding money owed, the company called in administrators from Ferrier Hodgson to take hold amidst the skid. It was at this point that the administrator cancelled the Telstra wholesale contract, leaving Kogan Mobile and Aldi Mobile up the river without a boat, let alone a paddle: nobody was able to provide wireless service to the two MVNOs, leading to a crisis.

Telstra was able to broker a deal with Medion Australia, which supplies to Aldi Mobile, however a deal has not yet been reached with Kogan Mobile to secure the future of the company. As a result, staying on the carrier is a sinking proposition. Telstra and Kogan Mobile have set up temporary service for those left stranded as they ferry their numbers off the service and onto other carriers.

Kogan Mobile took to its website this week to allege that there is a conspiracy afoot in the greater mobile industry in Australia to force out cheap carriers offering unlimited deals, and on first glance, that may be true. SavvyTel, Red Bull Mobile and Crazy Johns are just a few telcos that used to offer unlimited service, only to fold unceremoniously. Kogan Mobile has now joined the ranks of the flame-outs.

According to Telstra's statements today, it seems to think that public perception is against it for supposedly closing Kogan Mobile and doing nothing to save the challenger brand. It's now looking to counter that opinion with facts:

This week people may have seen that ispONE has gone into voluntary administration and the impact this has had ispONE’s customers, including Kogan Mobile. We are concerned at the misinformation and confusion around our role in this matter.
ispONE had been a customer of Telstra Wholesale for mobile and fixed line products. ispONE on-sold these products to retailers and in some instances to the public. For example, ispONE supplied the online retailer Kogan and Medion (who supply the ALDImobile brand) utilising the Telstra Wholesale pre-paid mobile product. Under this arrangement, Telstra had no direct relationship with Kogan, Medion or ALDI.

As mentioned, Telstra entered into a deal with Medion for the continued supply of mobile service to Aldi Mobile, but Kogan Mobile has been left out in the cold. Why? Telstra has little to no reason to offer, but adds that it has pursued a deal:

To date, we have not been able to reach an agreement with Kogan.
The decision by Ferrier Hodgson, as ispONE’s administrator, to terminate Telstra’s Wholesale’s pre-paid mobile contract meant we had no choice but to progress with disconnecting Kogan’s services, although we are currently providing an interim service at our own cost to Kogan end users so they have time to choose their next steps.

Kogan Mobile users can no longer recharge their services, and have roughly 30 days to get off the carrier and save their number easily.

It's not a great situation for anyone, but it's clear that people seem to think the bad guy in this scenario is Telstra. Otherwise, why the blog? [Exchange]

Image: Shutterstock



    Doesn't make your prices any less crap. Doesn't make your data plans any less shit. Certainly doesn't make up for the fact your customer service is so consistently poor. Which explains why such a large number of people flocked to Kogan in the first place.

    Last edited 21/08/13 3:23 pm

      Did you also stop to think that people flocked to Kogan from everyone else as well? People want the Telstra mobile service but don't always want to enter a contract or pay the price of accessing their entire network.

        I didn't say their network wasn't the best. No one would argue it's not the best. Just like no one would argue that their data prices and fair and reasonable, and that there customer service isn't shit.

          I may have been the lucky one but I have got some amazing service from Telstra recently. A Telstra Store employee was fiddling with my phone and dropped it shattering the screen. Within 15 minutes I was walking out of the Telstra store with a brand new phone, no questions asked, no paper work, no rubbish. This other phone was around a year old and to walk out with the latest model certainly made me happy

            I too have had nothing but good customer service from them. In saying that I do know two people that have had a big drama with them.

          You don't think there is a correlation there? Best network, highest prices. Seems like a sound business to me.

    The smaller companies are a threat to the larger ones. They actually offer realistic and affordable plans. Of course the big companies stomp them out as slyly and deceitfully as possible.

      This is implying that Telstra has some kind of control over one of its customers going into VR? The big companies maintain the mobile networks and pass on these costs to MVNO's through their wholesale arrangements. Nothing sly and deceitful here - perhaps poor management by ispONE which has lead to their customers left in the dark?

    Is anybody really surprised that Aldi was able to negotiate a deal with Telstra but Kogan wasn't?

      Not really, since Aldi was going through Medion who is mostly controlled by Lenovo these days and poor old Kogan was doing it themselves it appeared.

    This whole affair makes pretty much no sense because no one has explained who ispOne, kogan or aldi are (aside from mobile providers or something), or what the hell MVNO stands for.

      MVNO- Mobile Virtual Network Operator. Mobile service retailer with no physical network assets.

      As an employee of a company in the mobile space I can confirm that none of the major carriers seems particularly interested in providing service to MVNOs any more.

        Why did Optus just sign long term contracts with 20 MVNO partners then?

          Why did Optus shut down dodo's prepaid plans. Asked dodo to add 5gb data to my phone today, it went from 20 dollars last week to 40 dollars today. Something is going on

            Yes the costs are going up. $40 for a 5Gb data add on to a PHONE is still pretty cheap.

            The maximum data pack on Optus own plans is 2Gb for $25 a month. Besides I just had a look at dodo's prepaid magic sim plan and it seems pretty expensive.

            If you want more value, your choice is easy. Buy a pocket wifi on ebay and shop around - $40 will get you at least 10Gb elsewhere and arguably with much better internet. These wifi modems these days are very small, even for 4G models, are cheap to replace for the latest speed, will make your smartphone battery last longer and you'll get better speed because the modems have 3 antennas and your phone has one.

            In a world where costs are going up to pay for capital expenditure, consumers will always find alternatives that work for them.

              The costs shouldn't be going up, in fact they should be going down due to the extra people every day signing on for new plans. Internet plans for your house are 1000 percent cheaper, so why so much for phone data, and why has it gone up 100 percent in the last month. it's because of the greed of the three telcos we have in Australia.

          probably because the 20 mvno partners would have had to fold if they didn't sign what were undoubtedly much less competitive wholesale contracts...

      Man, googling is so hard.

        It is when "google it" is the first answer to every question ever and google indexes said responses over a useful answer, hence I don't bother any more.

          I'm confused, if you are reading a website and there is an article that you have no understanding of the basic principles, main players and one would assume from these facts, any interest in the topic at all, why would you read said article, and then comment that you don't know anything about the topic. Maybe I am the only person that only reads articles that I have an interest in.

    It’s now looking to counter that opinion with facts:

    Hi Luke (@lukehopewell) - could you please disclose what percentage of your institutions income is derived from Telstra, advertising or otherwise? This seems very much like a 'sponsored by' rather than a 'by Luke Hopewell'.

    Edit: Sorry, just saw the 'brought to you by' banner... Still very underhanded, but I guess a bloggers gotta eat.

    I think that even given these supposedly self-clearing facts - it's pretty damn obvious. They spun out ispONE exactly for this reason, as most large corporations do, in order to avoid any direct link. Aka, there's no direct link because that's how they designed it, not because they had no involvement.

    Last edited 21/08/13 5:20 pm

      Probably since most/all giz pages have iiNet adds with the dude tied up in the phone cords and playing with his toy train, I would say probably not too much.


      That's exactly why they do this sort of thing. They hope that no one notices the glove puppet nature of the set up and the funny this is that not many do.

      michael_debyl, you've set this out politely and in an informed manner so I hope that you get a fair response in return. I share your concerns.

      Last edited 21/08/13 7:57 pm

    I would also like to know consider how massive the Telstra advertisement is on this page. I would never refer to or expect Gizmodo to be the bastion of ethical unbiased journalism but it is pushing the boundaries.

    Kogan Mobile has been left out in the cold. Why? Telstra has little to no reason to offer, but adds that it has pursued a deal

    If Telstra are going to deny any responsibility for cutting off Kogan users, they have to explain why they couldn't reach an agreement. At the moment they are just waffling.

      Or perhaps you can explain why, Telstra should reveal comercialy sensitive information to the public?

      On the other hand perhaps Kogan can explain why they were unable to reach an agreement while Medion were able to.

      Kogan users contract is with Kogan - Telstra do not 'have' to do anything unless there is some rights of subrogation to Telstra in ispONE contracts with Kogan and Aldi.

      I suspect Kogan users have an contract with Kogan, not with Telstra. Likewise Aldi users with Aldi/Medion however this would be articulated through their individual contracts - one needs to read these to understand what rights/responsibilities exist between the parties.

      Not suprising that Telco's may be highly suspect of MVNO's with potential risk to reputation. are an idiot. the guy broke your phone! He should replace it. Why cant [email protected]%?ng telstra negotiate directly with Kogan as a wholesaler? Telstra you should be ashamed!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Great customer service!

      What's this have to do with Telstra customer service? Telstra aren't obligated at all to Kogan customers. Perhaps Aldi had a fairer deal to offer Telstra and Kogan didn't.

      Mate, as someone that has worked in the Industry (admittably overseas), a shattered screen is something that could have been sent away to be repaired, inconveniencing the customer but saving Telstra money.

      But the store made the decision to fix it then and there, no questions asked. My previous employer overseas would have sent it away, hence I stand by my statement that it is great customer service.

        But they are responsble for having dropped your phone? The phone belongs to you, and whilst in their care they have caused damage to it. Unless you had waived your rights as a human who has had their belongings damaged by someone else - the ball should be in your court for determining how they would fix (compensation/agreed repair/replacement) or if unsuccessful take it to small claims.

        Had you dropped it however the case would be different.

          Under the consumer law act, and the sales of goods act (I live in Queensland), they only have to return the property to its original state, ie, fix the damage done. They are not required to issue me with a brand new handset of my choosing! This is a big difference when you are coming from a year old handset to a brand new piece of technology.

      If Telstra was the devil you say they are, why are they, at their own expense, Allowing current Kogan users to continue using their network to allow them time to find an alternate service provider?

      Also If Telstra is the devli you say, why was Medion able to negotiate with Telstra to provide their own customers service?

        The deal is a7 day deal with no data. Not much of a deal is it

          You're right! Telstra shouldn't bother. Get rid of the lot.

          Last edited 26/08/13 3:58 pm

    I'm a kogan customer who is also a uni student and not interested in paying heaps for phone use (simply because I can't afford it!) I'm appreciating this forum because everyone seems well informed on what's going on... Can anyone tell me if the 'interim agreement' with Medion is likely to be long-term? I just don't want to sign up with Aldi and then have this whole ordeal happen again in a month's time??

      if your happy with the optus network vaya has quite a good deal for $18 a month - and if vodafone is good for you (they are improving a lot lately) then pennytel has some terrific deals.

      Only Aldi would know for sure, and they probably won't tell you. It's a large supermarket chain though, so it is a safe bet.

      Coles were eyeing off some sort of MVNO deal to rival Woolies and Aldi so i wonder what happened to that?

        I just ported from Kogan to Vaya.. Joined on the website on the 19th. Got a letter in the mail with a sim 21st. Activated it that day. 2 hours later i was connected to the service.. Must say excellent turn around time. Good on you Vaya. $18 a month for 1.5gb and $600 worth of calls 4G i'm not complaining. Its not unlimited but hey its $11 Cheaper!

      I don't believe I've read anywhere that the new deal between Medion and Telstra is "interim" at all. ALDI customers shouldn't feel a bump in the road. If you're truely concerned, you could try someone non-Telstra network (e.g. Virgin and Amaysim are cheap Optus-based).

      Try Woolworths prepaid. It's cheap and you get 5gb data. 29 dollars. It's on the Optus lines. If you live in Melbourne, no dropouts and excellent coverage.

    i am a telstra customer and I despise having to call them for any kind of customer service

      I lodged 3 complaints with Telstra with no response. The 4th they eventually responded after 10 days and told me I had to call "sales". I told them I shouldn't have to do that and they just called me they have lodged a new complaint for my response.

      One day, I just might get broadband. lol.


    Last edited 22/08/13 11:29 am

      If they contain links or e-mail addresses, they require moderation. The links could be to anything.

      Plain text posts should go through straight away.

        the one above it didnt have a link in it and was waiting for moderation??

          I think there's also a certain number of comments you can make in one day before all your comments require moderation - I assume to stop vandals and spam

    Is doesn't matter many people associate Telstra with the c word their monopoly has destroyed more than a few competitors over the years they will be weighed they will be measured they will be found wanting

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