ISPOne ordered to pay Kogan Mobile damages

The Victorian Supreme Court has today ordered ISPOne to pay Kogan Mobile damages and court costs after it was found to be in breach of the master wholesale agreement.

Telstra Mobile Reseller ISPOne was in breach of its obligations to Kogan Mobile for suspending the telco's customers who were deemed to be overusing the "unlimited" service, the Victorian Supreme Court has ruled.

Justice James Judd today ruled that ISPOne was in breach of its obligations in the Master Wholesale Agreement between the telco and Kogan Mobile for supending over 700 Kogan Moblie customers who were flagged by ISPOne as using too much data — over 400MB per day on more than two days in a month — or making too many phone calls in a short timeframe.

Judd ordered ISPOne to pay damages to Kogan Mobile for losses suffered due to ISPOne suspending those customers. The two parties have 14 days to negotiate an agreement on damages, otherwise the court will ultimately decide on the amount. ISPOne will also pay all of Kogan Mobile's court costs.

After three days in court this week, Kogan Mobile claimed victory on Wednesday , with ISPOne agreeing to not suspend, terminate, or refuse to recharge the services of any Kogan Mobile users without the permission of Kogan Mobile, or unless the user is in breach of a revised suspension policy that the two parties agreed to in February.

Kogan Mobile founder Ruslan Kogan yesterday indicated that despite the victory yesterday, the company has suffered brand damage as a result of its court battle with ISPOne.

In the case, which commenced in April , Kogan Mobile argued that ISPOne had prevented Kogan Mobile customers from recharging their prepaid mobile services without the permission of Kogan Mobile itself. Despite the attempts from Kogan Mobile to reactivate the services of those customers, ISPOne continued to block access to hundreds of Kogan Mobile customers who were deemed to be in breach of the company's acceptable use policy.

Prior to withdrawing its counterclaim yesterday, ISPOne had argued that Kogan Mobile was engaged in misleading and deceptive conduct by marketing the plans as "unlimited", when they in fact had very strict conditions around acceptable use of the service.

Kogan Mobile was awaiting the delivery of around 50,000 micro SIMs and 15,000 nano SIMs from ISPOne. They were originally scheduled to be delivered last month, but the company now expects the SIMs to be delivered by May 10.

A further directions hearing will also be held for the case on May 10.