blog Sometimes we amuse ourselves with thinking about what would make the perfect technology story on a mainstream media site like News.com.au. It would have to involve a high-profile Australian figure with a huge media presence (read: “huge ego”) involved in ethically questionable practices. The story would have to contain one or more critics of that person attacking them, and it would help if the critics had huge egos themselves. And the story would have to involve something of relatively little consequence but be on an issue which enough people cared about to make their opinions felt. Well, this story published on News.com.au this morning involving former SMH technology journalist Asher Moses (now spokesperson for the Australian Communications Consumer Action Network), Ruslan Kogan, technology reporter Claire Porter and a horde of Whirlpool critics seems to fit the bill perfectly. To top it off, there’s also an almost precise replica of the story on the Sydney Morning Herald (actually, it looks like the SMH got there first by a few hours). A few sample paragraphs:
“Kogan Mobile has been accused of allegedly duping its customers with “bait-and-switch” tactics after raising the price of its mobile plans by up to 50 per cent … Users of online technology forum, Whirlpool are also unhappy about the price increases”
We can’t help but find this kind of story hilarious, involving as it does a clash of gigantic egos over a relatively small issue. I mean, sure, Kogan has acted unethically in boosting the prices of its monthly mobile plans, but then many people, including myself, had always said that Kogan’s entrance into an already crowded mobile retailer marketplace was going to involve some teething pains. As I wrote in March, when Kogan started dumping customers who were using too much of their ‘unlimited’ quota:
“… 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.”
It appears that Kogan is starting to realise why Australia’s telecommunications industry is littered with failed mobile resellers. The sector offers high revenues, but very thin profit margins, and it’s very hard for mobile resellers like Kogan to offer anything that the big guns — Telstra, Optus and Vodafone — aren’t already. The surprising thing to me is that so many Australians fell for Kogan’s mobile pitch to begin with. The good times were never going to last forever.
Image credit: Kogan