The ispONE Case Might Mean The End Of Kogan Mobile

It's no secret that Kogan Mobile and ispONE have had their issues in the past, but the wholesaler's latest war with Telstra means that a contract that keeps Australia's cheapest MVNOs alive might be terminated. Kogan Mobile is today warning customers that the end may be nigh for their service.

Kogan Mobile is today emailing customers telling them that their service soon may shut off because of the court case between ispONE and Telstra, due to the fact that Telstra may soon kill its contract with the wholesaler.

The key point here to wrap your head around is the relationships: Kogan Mobile and AldiMobile on-sell Telstra's wholesale 3G network, but not direcly though Telstra. Telstra on-sells the service through a wholesaler called ispONE, which then flogs the service to the MVNOs.

Yesterday, Telstra and ispONE landed in the Federal Court, with the wholesaler alleging that Telstra would move to cut off 280,000 services over a billing dispute. Telstra was alleging that ispONE hadn't been paying its bills, while ispONE alleged that Telstra fibbed about data rates.

The two parties are locked in remediation as you read this, and if that remediation fails, the two parties will be back in a Melbourne court at 2:45pm AEST today.

In the emantime, Kogan Mobile is telling its customers to contac Telstra and plead with them not to pull the plug on the contract with ispONE, as it would negatively affect their service through no fault of Kogan Mobile.

The email in full has been republished below.

Dear ,
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,
The Kogan Mobile Team

More as it develops

Gavel image via Shutterstock



    Oh no. Also Aldi mobile???

      That's what I thought too. I'm pretty sure Aldi will have covered their bases.

        doesn't seem like it reading it again...
        They buy our mobile access from ispONE as well...

        Covered their bases how? They both get their service from ispONE, who are the only ones that have telstra wholesale. Currently the only alternative is that they switch to optus wholesale... which is rubbish for rural areas, and its much cheaper than aldi or kogan already. Either that or we wait (probbaly a long time) for another telstra wholesaler.

    This will pretty much be the case with any Telstra prepaid service that is not going directly through Telstra as ispONE is the only reseller for Telstra prepaid services. Sucks for me if this happens because I can only get Telstra service where I live and the prepaid plans Telstra offers are a rip-off.

      Instead of going telstra prepaid just get Boost mobile.

      It's $40 per month (same as Kogan) for unlimited calls text, and 3GB of data. It's actually better than the Kogan and Aldi service in that Boost has full access to the NextG (3G) network, at speeds of up to 42Mbps (with an appropriate handset), whereas Kogan and Aldi only have access to part of that network, and speed is capped at 7.2Mbps.

      You can pick up Boost sim packs from JB HiFi. The $40 sim packs include your first months access, so that packs are actually free ;)

      Last edited 13/08/13 2:33 pm

        Wont Boost also get the boot if ispOne gets cut off from Telstra?

          nah boost is Telstra dont think they have to go via a wholesale company to get access to their own network

          Boost is probably the safest option for now I just switched today from kogan esp with kogan recent $10 increase, so basically you can stay on kogan or aldi mobile if you on it and risk possible network shut down depending on the courts outcome, yeah it will cost you( if you switch) $1-$6 a month extra and 3 - 2 gig less than what your been getting but you do get access to telstra full 3g and next g network instead of having it shaped to 7mpbs and extra around 2% that isp looses of telstra full 3g and next g network I was able to port my kogan number to boost, long term regardless of the isp one and telstra court out come it be intresting to see the mid to long term of boost as it was with optus for around 12 years and telstra only took over this year so I know telstra has best mobile services but also has highest prices so will boost pricing change in next 6 - months or so ? My bet is yes

        Doesn't help people like myself who switched to Aldi from Telstra for the long expiry credit plan.

          Yeah that's an unfortunate situation. If you decide to port away from Kogan please let us know what happens in relation to your prepaid service, i.e. whether Kogan issue a response to a refund request, or if they honour or deny the refund.

    Months ago when Kogan Mobile or ISP One whoever is the culprit started disconnecting customers without any warning whatsoever because of so called "excessive" data usage, I thought that was a pretty good time to let go of this fantasy that prices could be so good. Then came the price the dispute between wholesaler and supplier, it seemed to me that Kogan is telling us they are completely innocent of anything through it all. Customers are best served leaving and choosing something else. Pretty happy now with Optus.

    In the end it is the customers who ultimately suffers and yet no one really gives a damn. least of all, Kogan.

    Last edited 13/08/13 12:16 pm

      Pretty sure Kogan does care or they wouldn't have sent a letter to all their customers. they are the ones who really stand to loose here, customers have the option to signup with telstra, boost or any of the optus resellers however Kogan cant do anything if ispOne and telstra break their contract.

        If Kogan had cared, they would have thought this out before, have a good business plan before venturing into this mess.

        1. Prepaid Customers under kOGANmobile got disconnected for excessive data usage, totally unprecedented, no prepaid customers in Australia has ever been accused of excessive usage, post paid maybe, not pre paid. In any case no warning, unable to make calls unable to receive calls for days, inconveniencing customers because Kogan Mobile cares and again not their fault.

        2. Kogan Mobile raise prices significantly with very little notice so the previous good value was just a trick to get you sign on, many customers waited months to get their sim card only to see this price rise that made it no longer a value to begin with, again it was not Kogan mobile's fault, you silly customers fell for it.

        3. Oh wait the whole thing might just fold, again not Kogan Mobile fault, we wrote you a email so it is not our fault, What utter bs.

        Well that shows they care.

        Last edited 14/08/13 1:10 pm

    Well this is annoying. I've been considering migrating a few family members from Kogan to Boost after Kogan raised their price. Now that Kogan's service could be terminated I'm definitely going to advise these family members to jump ship.

      Telstra’s sole and approved distributor – ispONE.
      As Boost also is powered by Telstra, I'm going to hazard a guess that Boost also get their connection through ispONE, so will be in the same boat. I think at the moment, other networks are the best cheaper alternatives, although not as good coverage.
      **Edit** - Did some more reading, and I was wrong. Boost are Telstra themselves, and don't get their access from ispONE

      Last edited 13/08/13 12:49 pm

        Boost doesn't access the Telstra network through ispONE. That's why Boost offer access to the NextG network, whereas Kogan and Aldi only have access to the crippled 7.2Mbps wholesale network (through ispONE)

          Who do they use? I was under the impression that ispone held the sole contract for Telstra reselling .. also wonder what will happen to those who have pre paid months or even up to a year in advance with Kogan ....

          And so you're right. I edited my post above before I saw that you already replied. Boost are Telstra.

            Well that's good news then .. Boost it is .. now just to figure out how I get my pre paid time back with Kogan if they pull the plug .. what would happen to peoples mobile numbers if the plug is pulled ??

            Last edited 13/08/13 1:03 pm

              I'd be inclined to transfer your number before the Kogan service goes cold. Who knows whether it will be possible to port your number once that happens. The question though is how long will it be before ispONE's contract gets terminated?? It would be wise though for anyone approaching the end of their billing cycle to jump ship to Boost. For people on a yearly Kogan plan though that's a tuff situation.

              As to getting your pre-paid credit back from Kogan, well I'm not optimistic about that either. Fortunately all my family members have been on a rolling monthly plan, rather than pre-paying for 12-months access.

              If you contact Kogan about a refund please let is know that they say.

              Last edited 13/08/13 2:21 pm

    Typo Alert:
    In the emantime*, Kogan Mobile is telling its customers to contac *

    If the service is terminated, what is our refund rights? Will we get our money back for the unused portion of the sighnup period?

    Oh Bugger... and i just got the yearly plan before the prices went up.
    and my mum and dad are on Kogan as well.

    wait a second.... isn't ispONE just Telstra?

      No, Telstra provides ispONE with wholesale access to part of it's 3G network. ispONE then onsells this access to Kogan and Aldi. So Telstra and ispONE are different companies.

      Boost however, is either owned or operated by Telstra (I'm not exactly sure which), so Boost's access to Telstra's 3G network is unaffected by this court battle between ispONE and Telstra.

    As long as I'm not forced to go back with vodafone

    mediation! Remediation is something you do to contaminated land.

    Another reason I'd choose Boost over Kogan or Aldi.

    What a joke, if its all over paying bills on time then this would never happen. Kogan, Aldi, ispone pay their bills on time, then this all ends. There is more to this. What other plans can beat kogans $300 annual plan, unlimited mms, sms, phone calls to home and other mobiles, 6Gb a month. Perhaps with the NBN taking over the cabling network, providing some mobile access to certasin areas, prices are rising and the kogan/aldi/ispone customers charge people alot less.

    I really do hate Telstra

      I'm no fan of Hel$tra either, however in this case I'm inclined to think that ispONE is most likely the bad guy. We've already seen ispONE behave poorly by kicking Kogan customers, and Telstra is claiming that ispONE haven't been paying their bills.

      I guess we'll find out soon enough who is the bad buy as the Telstra could only cancel ispONE's contract if ispONE have breached it in some way, such as failing to pay their bills.

        Dude, in another article ispone are saying that they have been over charged by Telstra by 19 million dollars! Cause Telstras billing is screwed up...... So they have withheld that payment.

        Now it wouldn't be like Telstra to screw up a bill over and over now would it? Hell yes!

    whats the big deal cant Kogan move to Optus mobile?

    and launch 4G services that will be awesome.

      No real rural coverage. I'd be going back to Telstra if they went to Optus.

    What's stopping Kogan or Aldi dealing directly with Telstra to buy their services?

      My thoughts exactly. If Kogan have as many customers as they say that have, they should be able to negotiate a deal directly with Telstra. Cut out the middle-man altogether.

    Forgive me for putting up a conspiracy theory, but could this not be a ploy by telstra to kill off the competition and push these prepaid customers across to Boost? Maybe the ACCC should be aware of this shenanigans.

    heard this story before. ispONE don't pay their bills. I for ONE hope they go under.

    Telstra are a joke as well as the ACCC, just like Coles and Woolworths

    Well fuck. Looks like i'm going back to Telstra prepaid, if this all goes belly up, don't really want to, i've been liking Aldi's prices for their prepaid.

    Regardless of the NextG access, Boost just isn't an option. For me - and a hell of alot of others attracted to the Kogan / Aldi plans , 3GB a month just isn't enough.
    It's a pity that Redbull Mobile ended up at the abattoir. Where I live and travel to, I actually have good Vodafone reception.

      If this goes belly up, I'm thinking of Woolies Mobile prepaid which uses Optus. $29 gets you $250 calls to any network with 45 day expiry & 5GB.

        it was crap, I went through the call limit in 2 weeks and it ended up costing me waaaay more...

        EDIT: $250 seems like a lot but it is charged at high rates so it is not much.

        Last edited 14/08/13 11:54 am

    Do the maths: 280,000 customers averaging $20/month = $70,000,000 pa. Optus and Vodafone would welcome that. Could you imagine how many people would be pissed off with Telstra - this would be a PR disaster for them if they threw the switch.

    It won't happen.

    Bought Kogan sim last week, instant regret...

      What's scary is that dodo is terminating their prepaid plan as well, and they go through Optus. Something is going on and it looks bad for everyone. My only hope now is Woolworths prepaid. I'm expecting that they will be shut down soon as well.

        I was with Dodo, hence the change to kogan.

    I reckon time has come to switching to boost mobile unlimited text and call 3Gb data, now 40 dollar sim pack half price winning!!

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