First time round, Kogan Mobile didn't have much success. Yet, this hasn't deterred owner and Australian entrepreneur Ruslan Kogan, as he’s back with a vengeance and this time he’ll be using Vodafone’s network. The announcement was made on the 19th of October by Ruslan himself and Inaki Berroeta, Vodafeone’s CEO.
Initially Kogan Mobile will operate on 3G, but Ruslan himself has assured us that 4G will be rolled out at the beginning of 2016. So, besides this minor disadvantage initially, it’s the pricing that has us at Buckscoop most interested, because in typical Kogan style he likes to price things very competitively. But, will Kogan Mobile offer big enough savings to convince Australian’s to give it a second chance?
The launch of Kogan Mobile will come with two plans initially, both offering unlimited calls and texts but with differing data allowances. The first plan will be called the 3XL, which will include 3GB of 3G data per month, whilst the second is named 5XL and will come with 5GB of data. Their prices are:
- $29.95 – 3XL
- $36.95 – 5XL
These plans can both be bought for a full year upfront which will save you $74 over the course of the year and Kogan is so confident in his pricing that he said, “We encourage consumers to look out there, to Google Search, for a better deal. We’re very confident they won’t find one.”
Mobile Virtual Network Operators (MVNOs)
We are all aware that Kogan Mobile isn’t the only MVNO out there and within such a diversified market, it would be silly to simply ignore all of the other competitors such as Amaysim, Woolworths Mobile, Aldi Mobile, Vaya and Coles Mobile for example. Some of you may have noticed that Coles Mobile was also launched on the same day, the 19th October 2015. So, how do all of these ‘piggyback’ companies that use major network spectrums compare against each other and who is the most affordable?
What you need to be aware of is that once an MVNO has bought access to a network, usually by paying wholesale prices, it’s entirely down to them to configure everything else around their packages for customers. Let's take Amaysim for example who have to be one of the best known MVNOs out there. This means they're responsible for setting their own prices, plans, support centres, marketing and retail distribution. Amaysim quickly gained traction in the market after launching initially, as they quickly worked out that customers wanted cheap mobile data so placed emphasis on this aspect. Building on this, they currently pride themselves in having the best Optus coverage for 4G. Lets see how Kogan's 3XL plan compares to others in the market in the image below.
WhistleOut is one of the best comparison sites for giving a fair comparison between mobile plans. And as you can see from the image above, Kogan Mobile fairs pretty well against other competitors out there (particularly if you're happy to pay 12 months upfront to get the discount). You'll also notice that between these MVNO’s, there isn't much between them in terms of pricing. This is testament to the fact that due to hyper competitive pricing, the MVNO’s are left with such small profit margins that many of them go bust. If that sounds familiar, it’s because that’s exactly what happened to Kogan Mobile the first time round, leaving 120,000 customers in the lurch in 2013 (albeit they were all fully refunded). Yet, maybe this time round their 5XL plan will compare better to competitors, check out the picture below for more details.
This scenario was repeated by Red Bull Mobile who tried their hand at the MVNO market, only to stop operating in 2013 as well due to low financial return. Therefore whilst an MVNO can offer pricing that the large Telco’s simply can’t compete with, it’s imperative that you choose wisely. As I mentioned above, the MVNO is responsible for its own call centre, so customer service is not guaranteed across any of them. Plus, a Telco’s network has different versions for rent, so even though two MVNOs may be using Telstra for example, they may both have completely difference coverage areas, data speeds and connection qualities.
There is a third dimension to the world of mobile networks and that is known as a partner provider. Basically, if your current provider isn’t one of the big three (Telstra, Optus or Vodafone) or it isn’t an MVNO, then it’s likely to be what the industry deems a ‘Partner Provider’. The set up of one of these companies is different, because one of the big three will either own a percentage of that provider, or own it entirely and be considered the low-cost version of that brand.
Optus, for example, bought Virgin Mobile in 2006 so Virgin Mobile is effectively a budget version of Optus. Telstra on the other hand bought Boost in 2013, which operates as Telstra’s low-cost prepaid mobile provider. Partner Providers differ because the network will have a greater incentive to make them succeed, so the sharing of customer service centres or providing full network access can be common.
In summary, whether Kogan Mobile will manage to stick around for a bit longer this time round is yet to be seen. But at least from the initial value for money perspective of the amount of data / minutes / SMSs you'll be getting, if you're looking for a more competitive mobile plan to save you money, then Kogan may have just what you've been looking for. I suspect though that customer uptake won't accelerate until 4G access becomes available next year, particularly as data seems to be the major aspect of their value proposition within the current price point.