ISPOne hits back: Kogan Mobile's unlimited is 'deceptive'

Telstra 3G mobile wholesale provider ISPOne has hit back at Kogan Mobile, telling the court today that the company was engaging in "misleading and deceptive conduct" by claiming that its mobile phone plans were unlimited.

Ruslan Kogan's mobile company Kogan Mobile took ISPOne to court last week, alleging that the Telstra wholesaler had breached the master wholesale agreement between the two companies because it had suspended customers who were flagged by ISPOne as using too much data or making too many phone calls in a short timeframe.

An affidavit provided to the court by a Kogan executive stated that, as of April 5, 600 Kogan Mobile customers had been suspended.

Appearing in the Victorian Supreme Court before Justice James Judd on Wednesday, counsel representing ISPOne, Peter Bick, hit back at the allegations from Kogan Mobile by seeking to launch a counterclaim that Kogan Mobile had breached the master wholesale agreement.

"We seek a declaration that [Kogan Mobile] has been in breach [of the wholesale agreement] by engaging in misleading and deceptive conduct in falsely representing that its mobile phone access plans were unlimited, when in fact they are limited in a number of ways, and by false[ly] representing that ... Kogan Mobile's data plans only have some specific limitations, whereas in fact, they have far more limitations than disclosed," Bick said

"We say that it is problems that Kogan Mobile has created for itself by representing to the public that its plans were in fact unlimited, or only limited in certain specific ways, when they are in fact far more limited — that has created the current disputes damages suffered by ISPone."

Bick said thatKogan Mobile should have been suspending its customers for excess usage, and that if Kogan Mobile didn't do it, then ISPOne was entitled to suspend those customers.

Kogan Mobile counsel Norman O'Bryan said that ISPOne was well aware that Kogan Mobile would use the term "unlimited" because the product was originally to be called "Kogan Unlimited".

"So the service suspension policy itself confirms that the service is intended to be an unlimited service. That is spelled out in words of one syllable in the policy itself very early on in its statement," he said.

Bick said ISPOne was surprised to hear that Kogan Mobile "still suggests the plans are correctly described as unlimited".

The term "unlimited" has been one that has caught out a number of telcos. Optus, TPG, and Dodo have all been targeted by the Australian Competition and Consumer Commission (ACCC) for previously using the term. The new Telecommunications Consumer Protection code brought in last year specifically states that the term "unlimited" may only be used in cases where the product on offer is truly unlimited.

Last week, Judd ordered that ISPOne supply Kogan Mobile with 50,000 micro SIMs and 15,000 nano SIMs that it already had on order, but which ISPOne had failed to deliver. These still haven't been delivered, but ISPOne has blamed the delay on supplying the SIMs on Telstra. Bick suggested that the SIMs would be delivered by Friday.

Judd flagged that the case could potentially be solved without the parties needing to go ahead with the hearing.

"It seems to me, if I may be so bold, to be the kind of case that screams out for somebody to sit down and bang some heads together and say 'you have got to arrive at a solution to a very practical problem'," he said.

Both parties agreed to mediation with an associate justice.

"It just seems to me that you have got to give this your best shot at finding some sort of accord in this commercial context," Judd added.

If an agreement could not be reached through mediation, Judd said that the early wrap up of another case opened up a "unique opportunity" for Judd to hear the case on April 29.

Ruslan Kogan had delayed a trip overseas to appear in court today, but was said to be back in town prior to that week in case he was needed for cross-examination.

If Kogan Mobile and ISPOne attempt to mediate while Kogan is overseas, Judd said that they will have to work out a way for his absence to be accommodated.

"I know that telephone communications are good if your SIM card is still active," he joked.

Kogan Mobile will still need to file a statement of claim, and ISPOne will need to file its defence and counterclaim.

Kogan Mobile and ISPOne are unable to comment while the case is still before the court.