news Maverick online retailer Ruslan Kogan has blamed an upstream wholesale Telstra partner for a policy which has seen some early adopters of his company’s “unlimited” mobile plans dumped for using too much of their quota.
Kogan first launched its mobile plans in mid-December last year, stating that it was the first Australian mobile provider to use part of Telstra’s mobile network for prepaid mobile services. At the time, Kogan chief executive Ruslan Kogan said Australians had been paying way too much for too long in terms of their mobile phone bills — a situation the newly launched Kogan Mobile would resolve.
“It’s a disgrace that current providers have been able to get away with astronomical charges, network issues, poor customer service, frustrating excuses and deliberately misleading pricing structures designed to trip customers up,” Kogan said. “Millions of Australians rack up unexpected excess usage charges, with the average ‘bill shock’ now standing at about $30 bucks per bill! No one likes to pay more than they expected, and no one likes to get ripped-off, so we’re putting a stop to it,” he said.
“From today, Australians can choose to say goodbye to excess usage charges and will be guaranteed to get what they pay for. No more running out of credit mid-month, no more complicated fine print tricking you into paying more – just $29 per month for unlimited standard calls and text and 6GB of data, or even cheaper if you sign up for a full year!”
Kogan’s offering was launched at a number of different flat price points revolving around a so-called “unlimited” proposition where many mobile calls and all text messages would not count against a normal ‘quota’ system used by other telcos, but would essentially be un-metered.
However, as first reported by Lifehacker earlier this week, a number of early customers who signed up to the service were rapidly churned by Kogan, as the company stated they did not appear to be using the service for “personal use”.
Queried about the issue today, a Kogan spokesperson directed Delimiter to a statement which the company first provided to News.com.au. In it, Ruslan Kogan stated that it on-sold its mobile services from a Telstra partner.
“Telstra’s partner is under significant pressure to restrict excess usage on the Telstra Network,” Kogan said. “This pressure is not being applied by Kogan Mobile. It is not Kogan Mobile, but Telstra’s partner, that administers the Acceptable Use Policy. While it is clear that certain users of Kogan Mobile have exceeded the normal usage of an ordinary person – some average over 14 hours of continuous calls per day and some have used over 40GB of data per month – it is also true that Telstra’s partner has acted without Kogan Mobile’s authority in preventing certain users from extending their access after their initial access period had expired.”
“Although Telstra’s partner acted without authority from Kogan Mobile, any affected users still received all of the services they had paid for.”
Kogan said there were a very small number of users who attended to use its services in a way that breached its Acceptable Use Policy, and as with any other telco, the company needed to ensure that the network was only used for personal use, to ensure the 99 percent-plus of customers could continue to get “a fantastic network at a great price”.
“We have nearly 100,000 very happy Australians enjoying the best value mobile phone plan in Australia, in what has been one of the biggest migrations in Australian telecommunications history. We love technology and we want everyone in the world to have access to it,” concluded Kogan.
So who’s to blame here? Is it Kogan’s high-usage customers, for attempting to push the definition of “unlimited” beyond all reasonable limits? Is it Kogan itself, for setting some rather weasel-word definitions of “unlimited” (I recommend you read its acceptable use policy to get the idea)? Or is it the nebulous Telstra partner which Kogan hasn’t named, for pushing Kogan to get its usage down?
Personally, I’m going to lay the blame for this one squarely at the feet of Kogan itself.
Some readers may remember that I had a little Twitter stoush with Ruslan Kogan in the closing days of 2012. At the time, Kogan was launching its much-hyped Kogan Mobile service, and Ruslan Kogan himself had taken to the Twittersphere to claim that his company was all set to revolutionise the Australian telecommunications industry and take on the big telcos.
In essence, what I highlighted to Kogan at the time was that Kogan Mobile wasn’t set to take on the big telcos, in actual fact; as it wasn’t building its own mobile infrastructure; rather, it would be reselling services on top of the infrastructure owned by other telcos (in this case, Telstra), and thus supporting them.
I can’t recall precisely what Kogan said at the time, but I do recall the debate got a little nasty. Well, I have to say, the problems Kogan appears to be experiencing this week are precisely those which many telco resellers experience. On the one side, Kogan has customers trying to eke out the most they possibly can from its service. On the other side, it’s got the major telcos trying to ensure their networks can still function. In the middle sits Kogan, which has suddenly gotten a taste of the huge revenues which telcos command; but it’s also got a taste of the small profit margins telcos, especially telco resellers, command, and how those profit margins are squeezed on both sides by customers and wholesalers.
This is nothing new for the telco sector. And Australian customers are certainly not new to so-called “unlimited” plans. But it is something new for Kogan. The company should have expected precisely this situation to occur; and the fact that it hasn’t headed it off at the pass is emblematic of Kogan’s approach to everything he does. The entrepreneur is clearly a maverick upstart with a huge clutch of great ideas and a gift for publicity. And he’s had great success in many areas — we have to give him credit. However, there’s also a strong dose of arrogance in Kogan’s make-up; he would be wise to look carefully before stomping down where so many have trod weary paths before.
Image credit: Kogan Technologies