Kogan Mobile says it is "devastated" and "extremely upset" at being forced to close its business, following the collapse of wholesale provider ispONE.
As revealed yesterday, telco wholesale provider ispONE has entered voluntary administration, effectively cancelling its contract to on-sell 3G mobile services to low cost MVNOs. As a result, Kogan Mobile has been forced to shut down.
In an email sent to over 120,000 reported customers, and published as a statement on its Web site, Kogan Mobile said it was "devastated" at the news, amid claims it has been "muscled out" of the mobile industry in Australia.
"We are extremely upset to have to bring you this news. We set out with the aim to make mobile services in Australia more affordable for all, and were well on the way to achieving this goal."
"The migration to Kogan Mobile was one of the biggest in Australian telecommunication history. As we lowered the prices for services, we were happy and so were our customers - but not everybody in the industry was pleased with what we were doing."
"We’re not happy about this but at this stage it's not something we can do anything about. Kogan Mobile has been muscled out of the mobile industry against our will by a force much bigger and much stronger than us."
Australian Communications Consumer Action Network (ACCAN) spokesman Asher Moses said the loss of Kogan Mobile will unfortunately mean less competition in the market.
"The possible loss of Kogan comes on the back of a number of smaller providers such as Red Bull Mobile going under. This will mean less competition in the market and potentially higher prices for consumers.
"Less choice is not good for consumers long-term but short-term our first priority is ensuring Kogan and Aldi Mobile customers aren’t left without a mobile phone service."
ACCAN advised that any Kogan Mobile customer should switch mobile providers as soon as possible to avoid a sudden loss of service, but warned consumers to expect delays when porting their number due to the high volume of customers expected to do so over the next 30 days.
"Affected consumers should consider switching mobile providers as soon as possible to ensure they can maintain their service and phone number into the future. Consumers should expect delays in porting their number across to new providers."
"For Kogan customers, Telstra’s interim arrangement - offering only 20 minutes of calls, 20 SMS for a week and no data before you are cut off from making calls - will make it necessary for customers to seek a new provider as quickly as possible."
Despite Kogan Mobile claiming it has been muscled out of the industry, its major competitor, Aldi Mobile, will continue to operate as usual after it struck a deal directly with Telstra wholesale.
The "interim agreement" was made direct with Medion Australia, who sells mobile service through the Aldi Mobile brand. An Aldi Mobile spokesperson confirmed that its network services are not affected and will continue as usual.
"Medion Australia and Telstra Wholesale have been able to negotiate a direct supply agreement today, so the network services for ALDImobile customers are not affected."
"Customers will be able to purchase ALDImobile sim cards and recharge vouchers as per normal through their local ALDI store or on www.aldimobile.com.au"
As part of the Kogan Mobile shut down, Telstra wholesale will "progressively deactivate" Kogan Mobile customers over the next 30 days, moving all active Kogan Mobile services to a limited seven day plan.
While Kogan Mobile itself has no control over the deactivation process, it has confirmed that any unused credit that has been paid for will be refunded on a pro-rata basis.
"Kogan Mobile customers who have remaining credit at the time their services are terminated by Telstra will have their entire remaining balance refunded to them by Kogan Mobile. The refund amount shall be calculated as the pro-rata amount remaining on the date of deactivation of service.
The refund of the unused portion of any account will be paid back to the credit card or Paypal account that a customer originally paid with, the company said.