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Kogan Mobile accuses Telstra of hiding deathbed ISPOne deals

The saga of Kogan Mobile's demise rolls on as the company calls on Telstra to come clean with the Australian public.
Written by Chris Duckett, Contributor

While Kogan Mobile remains as a mobile virtual network operator (MVNO) without a wholesaler after the collapse of Telstra 3G reseller ISPOne, the company has unloaded in a blog post today that accuses Telstra of spreading misinformation and confusion.

In response to a blog post from Telstra, which said that the incumbent telco was willing to enter into arrangements with Aldi Mobile, Medion, and Kogan on "commercial terms", Kogan Mobile called on the telco to be transparent and make public the rates and terms upon which it would be prepared to supply Kogan with services.

"The reality is that to date, Kogan Mobile has not received even remotely "commercial", let alone competitive, terms of direct supply," Kogan Mobile said. "Kogan Mobile has done everything possible to protect its customers: If commercial terms of continued supply were available, of course Kogan Mobile would have taken them up, and still will."

In line with comments made earlier in the week that forces were at play in the Australian communications sector that didn't want Kogan in the market, the stranded MVNO said that it was eliminated as a result of decisions made by its upstream providers.

"As Telstra well knows, Telstra terminated its supply arrangements with ISPOne with the knowledge that this would result in the loss of service to Kogan Mobile and its customers."

Kogan called upon Telstra to publicly disclose the agreement that brought about the dismissal of an injunction won by ISPOne against Telstra to prevent the disconnection of ISPOne customers.

"Justice Pagone of the Federal Court held that ISPOne's claims against Telstra had a sufficient basis to justify an injunction. In particular, we invite Telstra to publicly disclose what associated agreements, arrangements, or understandings Telstra entered into in connection with the dismissal of the Federal Court proceedings brought by ISPOne in the minutes before administrators were appointed."

In the blog post, Kogan Mobile accused Telstra of creating terms with ISPOne that doomed it to failure, and why, with the collapse of its sole distributor of prepaid 3G services, it did not attempt to establish an alternative.

The MVNO raised the allegation that Telstra ran it out of the market because its "retail pricing was too cheap".

"We hope and expect that Telstra will come clean with the Australian public and Kogan Mobile's 120,000 customers on these matters," said the blog post.

Despite Kogan's rhetoric, iiNet CEO Michael Malone said yesterday that the end of Kogan Mobile was "the best news" for the mobile reselling business, and that Kogan Mobile's business model was not sustainable.

"Some of the best news to happen in the last week was for [Kogan Mobile] to disappear from the market. It was unsustainably low [and] I think everybody knew that as well," he told journalists on a conference call on Wednesday.

"ISPOne was the meat in the sandwich there where they were paying Telstra per-minute rates, and they were selling it onto Kogan at unlimited rates," Malone said.

"There was another ISP that this happened to sometime ago that also had the word 'one' in its name."

The Australian telecommunications industry has been preparing for the exodus of Kogan's 115,000 customers, with Communications Alliance CEO John Stanton stating that extra resources have been sought to handle the increased number of ports expected.

ZDNet understands that Kogan Mobile attempted to move to either Vodafone or Optus, but was not successful in its approaches.

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