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Thodey defends terminating Kogan Mobile connections

Telstra CEO David Thodey has defended the company's decision to end the offering of mobile services to Kogan Mobile through reseller ISPOne.
Written by Josh Taylor, Contributor on

Telstra CEO David Thodey has defended Telstra's decision to terminate its agreement with mobile reseller ISPOne, and in turn Kogan Mobile, stating that ISPOne had owed Telstra millions of dollars.

Earlier this month, ISPOne was sold off to Melbourne-based telecommunications company CONEC2, after it had been placed in administration with Ferrier Hodgson due to millions of dollars in outstanding debt owed to Telstra and other creditors over the past several months.

At the centre of ISPOne's financial woes was an ill-fated deal with Kogan Mobile to resell mobile services on the Telstra 3G network. Kogan Mobile's 115,000 customers used much more of the service than ISPOne had expected, and the result was that ISPOne could not recoup its costs for providing that service to Kogan Mobile and still pay its bills to Telstra.

When the agreement between Telstra and ISPOne was terminated, Aldi began wholesaling directly through Telstra, but the company was unable to reach a similar agreement with Kogan Mobile. Telstra alerted Kogan Mobile customers via text that they would have 30 days to switch over to a new provider, and would only get 20 minutes of calls and 20 texts, but no data.

A shareholder at Telstra's retail shareholder meeting who also happened to be a Kogan Mobile customer described the message as being "blunt" and criticised Telstra for not helping Kogan Mobile customers more.

Thodey argued that the company had done more than many others would have.

"When I look at it, we actually kept your services going longer than many others would have done," he said.

"ISPOne, when it went into receivership, your [the shareholders'] company has not been paid tens of millions of dollars because this company was not paying its bills. That's the other side of the story. We're a business and we can't have companies dealing with us who don't pay their bills.

"I wish I could give things away, but I can't. I think many of the Kogan customers did move across to Telstra.

"We went out of our way to do that, and in fact did far more than many operators would have in that situation."

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