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21 Aug 2013
By Stuart Lee
Aug
21
2013

ispONE in voluntary administration

Filed under: ,

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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.

On Monday, ispONE went into administration owing tens of millions of dollars.  The voluntary administrator who took over ispONE, Ferrier Hodgson, cancelled the Telstra Wholesale pre-paid mobile contract.

This meant there was no supplier for Kogan and Medion.

We are prepared to enter into direct arrangements with both Kogan and Medion on commercial terms. Fortunately, we were able to enter into a direct supply arrangement with Medion so that ALDImobile can continue to offer services to its customers. 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.

Telstra has played a leading role in the highly competitive and dynamic Australian mobiles market since its inception. In addition to providing mobile services to millions of Australians directly, our wholesale mobile offerings result in more choice for consumers by providing access for other retailers to parts of our 3G mobile network covering 98% of the Australian population.

We have a strong business providing mobile products through Telstra Wholesale to a number of mobile retailers and this is not going to change.

For any of Kogan’s end users who are impacted by their retailer’s decision to no longer provide services, more details on the interim arrangements we have put in place is available on the Telstra Wholesale website.

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Posts: 1

28 Comments

  1. Micka says:

    The simple fact you came to the party with albeit brief solution for Kogan mobile users was a nice touch. I hope the ACCC has a strong hard look at the virtual mobile wholesale network as a whole. And to anyone who signed up to Kogan remember all that glitters isn’t gold.

    • Richard says:

      Telstra and its predecessor have a long history of providing an inferior service at excessive prices -- what’s happened here looks suspiciously like misuse of monopoly power to protect excessive profits. In some parts of the world that sort of behaviour attracts billion dollar (or Euro) fines. It’s to be hoped the ACCC carefully investigate the collapse of ispONE and the negotiations that preceded it.

  2. Lachie says:

    I find it hard to believe that you attempted and could not reach a direct agreement with Kogan. If you were happy with the wholesale prices you gave to ispONE, why would you not want to enter into a more profitable direct arrangement?

    • Jamie [Editor] says:

      Hi Lachie, as we have demonstrated with the agreement with Medion, we’re open to discussions with any party who wants to become a wholesale customer. As Stuart has outlined above, we are prepared to enter into direct arrangements with Kogan on commercial terms but to date we have not been able to reach an agreement.

    • Rob says:

      Lachie, think you need to read the various articles on the subject, I’d suggest that the prices Kogan want are lower than the price Telstra were receiving from their customer.

      The voluntary administration wasn’t just because they forgot to post their payment cheques ;)

    • philip says:

      Hello Lachie,
      I would imagine that Aldi would be able to argue its case with from a point of strength as its main business is not focused on phone networks, and it is globally probably much bigger than Telstra

      Philip

  3. Tony says:

    Like Lachie I find it hard to believe that you could not come to a direct arrangement with Kogan. Alot of Telstra users had switched over to Kogan mobile for the simple fact that they wetre getting a better deal. Why is that. Simple fact is that Telstra plans are too expensive and Kogan was giving you more. Wouldn’t it be great if in actual fact Telstra could offer similar packages as Kogan. But no that would be eating too much into the profits that you guys need to make every year. Its not just about making money how about looking at providing quality services as Kogan did.
    Telstra, the big boy that you are, did not like being pushed by the new boy on the block, Kogan and therefore it had to be wiped out. A threat no more. How long will Aldi last??
    I am or was a Kogan mobile customer, and as it was stated that we would be 2 warnings that my phone service was going to be shut down. Well I got my first one on Tuesday 20th August and surprise, surprise today Thursday 22nd August I am shut down and off the air. Haven’t even had enough time to organise and shift to another telco. Thanks Stuart and Telstra for your understanding…NOT

    • Jamie [Editor] says:

      Hi Tony, We provide mobile services to millions of Australians directly and our wholesale mobile offerings result in more choice for consumers by providing access for other retailers to parts of our network. I’m sorry to hear about some interruptions to your service. Customers of Kogan are not customers of Telstra, but there is information on the interim arrangements we have put in place is available on the following page.

  4. Jim says:

    “Customers of Kogan are not customers of Telstra” -- so next time you Porche breaks, don’t go to Porche, go to the reseller ’cause your not a Porche customer.

    Maybe read your Consumer Protection Law again… oh… sorry, that only applies when it needs to.

    • Tosh says:

      Oh Jim, you misunderstand wholesaling and retailing. ispONE was Telstra’s customer. Kogan Mobile was ispONE’s customer. Kogan Mobile’s customers were Kogan Mobile’s customers. KM’s customers did not buy service from Telstra. They did not enter into any contracts with the Big T. Even if their service was originally ‘manufactured’ by Telstra.

      To use your car analogy (properly), if your Toyota Lexcen had a problem, you’d have taken it to Toyota or your Toyota dealer, even though it was manufactured in Holden’s Elizabeth factory.

  5. I agree very much so with Tony. I rang your PR dept( names can be supplied), when ispONE was in mediation to find out if we were going to be shut down . I was assured that a possible deal direct with Kogan would be there and we would not be left in the lurch….what a joke!! We had only signed up for a years supply my wife and myself on the 12th Aug.

    This is an absolute abuse of power….you chopped us off without a moments thought…you chose the wholesaler and you knew all along where this was going.Remember, we as phone users only see a Telstra card in our phone…not an Aldi or Kogan…A TELSTRA CARD! So please do not try to tell us this is nothing to do with you ….you are the ultimate supplier of the service .

    Amazing you can do a direct deal with Medion but not with Kogan, is it because Kogans’s prices were cheaper than Medion’s?

    Remember you chose the SOLE wholesaler so now you go direct?? Why did you not do that in the first place? Remember it is your card in my phone….and you hung us out to dry!!! I have lodged a complaint with the ACCC so we will see, but where were the regulators when we needed them …..not our problem?

    You should be ashamed of yourself!!!!

    • Jamie [Editor] says:

      Hi Michael, Just to clarify, ispONE went into voluntary administration on Monday and the administrator cancelled the contract for Telstra Wholesale. This decision by the administrator meant there was no supplier for Kogan. We are currently providing an interim service at our own cost to Kogan end users so they have time to choose their next steps. We provide mobile products through Telstra Wholesale to a number of customers and this is not going to change.

  6. Bill says:

    Like many others I was with Kogan Mobile and was very very happy with every aspect of it. I know it’s not telstras fault that ispONE went into administration but its what you’ve done, or haven’t done, that I’m really upset about. I can’t see how you can say that you are happy to enter agreements with Kogan Mobile when nothing has been done to help Kogan but Medion (Aldimobile) was basically saved straight away. Also i suspect that you are just saying this to make peope happy as on the Kogan blog they said this is the first they had heard of it. I for one was nearly at the end of my month of credit when all this happened and am now on the 7 day plan that you are offering (which is one thing that you have done to support people like me….but the only thing) I have only about 5 days until I lose service all together. I live in a rural area on a farm so it’s not like I can just pop into a phone shop and grab a new SIM card. I still don’t have a new mobile provider and honestly don’t know what I’m going to do. In my opinion, and many others, it is obvious that you helped to push Kogan Mobile out of the equation because they were far to competitive for Telstra and many of your customers, me included, were leaving Telstra to go over to Kogan. As you can see I am quite upset with what has happened and with telstra. I would say you can count on not getting back a single of the 120,000 Kogan customers, As for me I will never go back to Telstra for anything. It’s really disappointing to see such a good mobile provider that so many people were happy with just thrown to the side of the road just so Telstra can make a few extra bucks. I hope you are happy for putting people like me in a very difficult situation.

    • Jamie [Editor] says:

      Hi Bill — I hope the interim service we are providing at Telstras’ our own cost to Kogan end users is proving helpful to you.

    • Bill says:

      Jamie, it is helpful but the whole point is that this should never have happened. Why didn’t telstra help Kogan out like they did Medion?

      • Jamie [Editor] says:

        We have said we are prepared to enter into direct arrangements with both Kogan and Medion on commercial terms. But as I am sure you can appreciate we won’t be conducting commercial negotiations in public, so I can’t provide further information.

    • Wayne GAN says:

      I believe Telstra is the one not telling the truth.

  7. Kumar says:

    This so called attempt to reach a negotiation with Kogan? I don’t buy. Knowing how many Kogan customers (115,000) are going to be stranded and pushed into limbo but couldn’t do anything?
    Hard to believe!
    It was good to use whole sellers to collect money in big chunk and do the work and introduce 115,000 customers to use Telstra Network? but when it comes to service it’s too much for Telstra to manage!
    This is nothing but to indirectly get people to use Telstra Direct Pre-paid retailer Boost.
    Shame on you Telstra for trying to make excuses.
    We all know the problem let’s get to work and come up with a long term solution for 100,000 customers.
    Don’t say Kogan customers are not Telstra customers. The $$$ Telstra have in their bank cannot differentiate who’s $$$ is who’s!

  8. sarah says:

    RIP Kogan. We love u. Telstra, we know you arent innocent in this situation so dont even try.

  9. Adam says:

    The misinformation can be cleared up by answering the following:
    - After kogan mobiles success, did Telstra increase it’s wholesale prices to ispone?

  10. Bill says:

    I all just really disappoining and to be honest I am disgusted in what telstra has done. I also read the link that was posted by Lachie and it further proves the telstra are to blame.

  11. Richard says:

    It’s almost impossible for a Kogan customer, like myself to sort out the whys and wherefores of this, given the continual and conflicting statements from the parties. Personally I’m more inclined to believe Kogan -- they at least are able to quote Federal Court judgements in support of their case, which is why I’ve referred it to the ACCC.

  12. Richard says:

    Jamie (Editor) says;
    “Hi Michael, Just to clarify, ispONE went into voluntary administration on Monday and the administrator cancelled the contract for Telstra Wholesale. This decision by the administrator meant there was no supplier for Kogan. We are currently providing an interim service at our own cost to Kogan end users so they have time to choose their next steps. We provide mobile products through Telstra Wholesale to a number of customers and this is not going to change.”

    I think it’s unreasonable to blame the Administrator -- in fact the suggestion that a reputable Administrator would cancel supply contracts unless there was no reasonable alternative is probably libellous.

  13. sarah says:

    Kogan mobile entered into something stupid and we blame telstra? ??
    Kogan knew this would destroy ispone and knew the price wasn’t viable but did it anyway.
    Wake up kogan customers he did this as a joke and didn’t care about how it would affect you.
    How about the staff he didn’t care about them either.
    No other company can offer plans that cheap, there is a reason.
    I saw a car analogy above Here’s another.
    If you want a good car that will last and work all the time it’s going to cost.
    Don’t get upset when you get a cheap car and it breaks down 6 months later.

  14. Michael says:

    Telstra Telstra Telstra, I’ve been a customer of many services for over 25 years. With the advent of the mobile phone service (one that Tesltra has gone from $5/mth to now $50/mth) that should be cheaper due the number of subscribers has increased in cost.

    Read on…http://www.kogan.com/au/blog/kogans-response-to-telstras-response/

    Add to that, a reputable (clearly by the sheer fact that they’re prepared to be transparent with it’s customers’ on a regular basis) company as Kogan could be third in line reseller and still be almost half the cost of Telstra offering significant better deal for their customer on the very network owned by Telstra…

    Sorry Telstra, this does not stack up at all -- Kogan have 120,000 customers and you don’t wish to discuss a business deal to ‘look after Kogan customers’ -- c’mon fella’s we’re not mushrooms anymore.

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