Kogan Mobile: The Limits of Unlimited

Just how unlimited are Kogan's unlimited plans?

Last December Dog and Bone reviewed the then-new mobile service from online electronics purveyor Kogan, which is imaginatively called Kogan Mobile. The original review - which I will modestly call a masterpiece - can be found here.

As an update, it seems some Kogan users have grown disgruntled at the service. This thread on Whirlpool goes into the whole messy business, although for those inclined to wade in I must warn you that like most online forums this thread is mostly an echo chamber for people keen to vent, with the intention that everyone else agree with them. 

The crux of the matter is that a Kogan user wasn't allowed to have his service recharged for the month, and they told him to take his business elsewhere. The issue was that despite being on an ostensibly 'Unlimited' plan, he was disqualified after he used his phone too much.  

Kogan advertises its plans as being Unlimited. Those with much experience in the Australian telecommunications space will doubtless feel an immediate quiver in their antennae at that term. The term 'Unlimited' of course implies that there is no limit on the calls you can make when you sign up to that plan. In reality however, Australian mobile plans are unlimited in that same way that Two and a Half Men is comedy, in that they can only sustain that definition if we decouple the terms from their traditional meanings. 

In reality, Unlimited plans in Australia aren't unlimited, and the ways in which they are limited is detailed in their Fair Use policy. These policies generally insist that the service not be used for business purposes, and that customers can't use the service to maintain an unbroken line of communication (by running calls for hours on end). 

Even within regular plans that are often unlimited components. For example, Telstra's various fleet plans allow users to call members of their fleet for free. The top level cap plans are typically unlimited as well. The advice we have received from most telcos is that they don't really mind what you do with it, so long as it's not horrifically excessive. We've had clients who put unlimited SIMs into GSM diallers, and saved thousands of dollars from their landlines bills. We quizzed the telco about this, and were told it was fine so long as the client didn't run a call centre through the SIMs. Such policies are at the discretion of the provider.

The Kogan user in question, as well as others, have run afoul of this policy, and Kogan exercised their right to discontinue their service. Bear in mind that this is not a contracted service, but a pre-paid month-to-month arrangement. The users weren't disconnected mid-month. They received everything they paid for - which was unlimited calls for one month - but weren't allowed to recharge. The notification from Kogan runs:

'We have further investigated your account and you will need to churn your services to a new provider as we believe you are not using the service for personal use and we are no longer able to provide you services. Your service will not be terminated and you will have 90 days after expiry before your number goes into a passive status so you will need to churn out your number before this time.'

I don't see that that is the issue, and I can't see the TIO getting involved for that.

The users insist that they hadn't been using their phones all that much. This being an internet forum, all we have to go on is their word, but let's assume they're not exaggerating the breadth of the injustice. My strong suspicion is that their usage triggered an automatic response from the Kogan system (or from either Telstra, who wholesales the service, or from ISPOne, the intermediary reseller), and that this trigger point is set quite low. [EDIT: SMH reports that Telstra have said the issue isn't of their doing.]

 In Australia, no Unlimited plan is truly unlimited, but Kogan's appears to be even more limited than most. One would hope they'll be a bit more generous going forward. I imagine the TIO will examine this aspect. In the meantime it is something to be aware of.

The Kogan customer service reps surely have no discretion in this matter. It's all automated, and, as I said in the original review, Kogan's customer service generally leaves much to be desired. Once you get your SIM, you're very much on your own. 

The other issue, of course, is with the term 'Unlimited'. It is very misleading, and in the case of these users was clearly fundamental to attracting them as customers. This is precisely the kind of advertising that the ACCC is trying to eradicate. Indeed, I'm surprised it persists.

[UPDATE 20/3/2013: Kogan have said they are working on the issue, and will have a statement by the end of the week.]

Thank you to the reader who alerted us to this. I'll keep this post updated if any more details emerge.