Kogan Raises Prices

Distracted or inattentive customers of Kogan Mobile have today awoken to the disturbing news that their mobile plans, previously among the cheapest offered anywhere, have markedly increased in price.

Other users, including those who bother to read emails from their mobile service provider or peruse the fine print on their website, will have known for some time that this change was coming. They’re probably no happier about it, since in some cases the increases are significant. The lowest plan - $29 unlimited – has increased by 34%, to $39.

Side note: as ever when talking about modest values it is best to use percentages to illustrate your point. An increase of $10 per month sounds far less impressive than an increase of over a third. Most reports have understandably gone with the percentage figure. Kogan, understandably, hasn’t. Indeed, Kogan has been at pains to point out that their plans are still ‘among the cheapest’ available.

They’ve also been at pains to dismiss claims that they’ve engaged in a ‘bait-and-switch’ with their customers, luring users in with very low plans, only to drastically increase the prices once the users are ‘locked in.’ There’s probably something to this contention: after all, it is the principle that underpins all ‘special introductory offers’ and ‘grand opening sales’. (The new seafood burger place around the corner from me is offering half-price burgers for the first month. No one seems to be accusing them of cooking up a bait and switch. A bait sandwich, perhaps.)

The original pricing, Kogan claims, was nothing more than a special introductory offer, which could end at any time. This was stated on their website, although only for the last few weeks, and not a prominently as they’re now claiming. On the other hand, they’ve hardly endeared themselves to outraged users by coming out swinging. The attack on ACCAN was as unwarranted as it was metaphorically garbled. They refuted ACCAN’s claims of a bait-and-switch, and held that it “reflect poorly on the advice generally propounded by that organisation. Sometimes, the empty vessel makes the most noise”. Unpack that.

Anyway, let's test the claim that Kogan’s mobile plans are still among the cheapest available in the market. I’ll look specifically at the lowest 'Unlimited' plan, and compare it to similar plans offered by other budget telcos. All these plans are month-to-month, with no lock-in contracts.

 

A few notes:

  • All these plans include calls to 1300 and 1800 numbers in their 'Unlimited' allowance. This is essential.
  • Included Calls does not include international calls and premium calls. You know the drill. Standard stuff only.
  • Most of them have fairly draconian Acceptable Use Policies (AUP). For example, Kogan’s AUP permits only 400Mb of data use per day. Our advice is always to read the fine print.
  • The purpose of this comparison is merely to see where Kogan’s lowest 'Unlimited' plan sits within the market, not to provide advice on which plan is best. For example, most users do notrequire an Unlimited plan;
  • Several of these carriers also offer cheaper plans that aren’t 'Unlimited', but instead use the usual 'call credit' model. For example, Vaya has a $34 plan offering $850 in credit.
  • I have excluded TPG Mobile, as it has no Unlimited plan.
  • I've probably missed some other budget carriers. New ones seem to pop up every other week.

The upshot is that there is some truth to Kogan’s claim that their plans are still among the cheapest going around. They compare favourably with the most inexpensive ‘Unlimited’ offers from rival MVNOs (nothing from Layer One providers comes close). Aldi is $4 per month cheaper, but offers 1Gb less data, on the same network. As such, it is questionable just how many of Kogan's 110,000 customers will depart as a result of this price increase.

However, now that their plans aren’t clearly front-runners on price, certain other factors come to the fore when a choice is to be made, such as 4G (LTE) coverage (Kogan is 3G, throttled to 7.2Mbps max), and their historically stern enforcement of the Acceptable Use Policy. This will be for the market to decide.