Kogan has become a mobile telecommunications provider. Their plans are very cheap. It is in our nature to presume there’s therefore something wrong with them.
Here at Dog and Bone, we live by the mantra that if something looks too good to be true, then it probably is. After all, while we’re in the business of obtaining great results for our clients, a lot of money depends on them also being the correct results. You’d be amazed to know how painstakingly we go over every number before it makes it into a final report.
For example, every time Analyser spits out a result that look astoundingly great (or bad) for the client, a red flag is raised in the analyst’s head, which is wirelessly connected to the hive-mind that inhabits the company safe. An experienced analyst can usually tell quickly how good or poor a certain telecommunications offer is going to be from a rudimentary appraisal, and when Analyser churns out results that differ markedly from this our first instinct is to go back and check everything. Otherwise the hive mind disciplines us, and no one wants that.
Anyway, this brings me to the latest entry into Australia’s mobile market. Online electronics retailer Kogan this week released pricing and details for its new pre-paid mobile services. By Australian standards, it is almost impossibly inexpensive, almost on par with the prices paid by nearly everyone else in the developed world (apart from New Zealand – sorry guys). It is also extremely simple. Here it is:
This is the kind of pricing that sets red flags fluttering. This is pre-paid, meaning you aren’t on a contract, and you don’t get a phone. But you also don't run the risk of huge bill blow-outs. But, for $29, you do get a month’s access, unlimited calls and SMS, and a pretty huge 6Gb of data. It is pleasing to note that this Unlimited provision includes calls to 1300 and 1800 services, which is important for anyone who needs to regularly contact helplines or government services.
Also, unlike Amaysim (whom Kogan is clearly undercutting at the budget end of the market), this doesn’t rely on the Optus 3G network. According to Kogan it uses ‘part of the Telstra network’, which sounds a bit weasily. In real terms this means the service uses the Telstra 3G network, although Kogan has confirmed it has no direct connection to Telstra, but operates through a third-party wholesaler.
It must be noted, however, that even though the service will operate on the 850MHz spectrum, this is not operating at full Next G HSPA+ capabilities, and that data speeds are limited to ‘normal’ 3G speeds (550Kbps – 3Mbps are typical although your mileage may vary, but hard-capped at 7.2Mbps). Most users report that data speeds are the same as regular Telstra post-paid data speeds.
In terms of coverage, Telstra's wholesale 3G services 98.5% of the Australian population (Next G is 99.5%, while the other carriers offer 97% (Optus) and 94% (Vodafone)). Of this 97% is 3G, while the remaining 1.5% is the extended voice footprint provided by 2G. Voice performance, as far as can be adequately gauged, is the same as normal Telstra quality.
It should also be stressed that this is not a service that is suitable for businesses. Kogan is an online retailer of (primarily) electrical appliances, and not a business grade telecommunications provider. Customer service is not their strong point (even when it comes to their core business), so be warned that once you've gotten your service, you are largely on your own.
These mobile plans also include no international calls, or roaming capabilities. International calling is only available if you purchase an additional bolt-on pack for $14.99 (details here). Some users have also encountered issues with MMS not sending, while most iPhone users are unable to utilise iMessaging, which is a serious shortcoming. There has been no definitive word on whether these issues can be fixed, let alone when.
So, all up I’d say this is a very interesting development in Australia’s retail mobile service market. The advantages are the very low cost, spread over a simple array of plans, with no confusing call rates or caps to worry about. Furthermore, the fact that all plans are prepaid means that there is no risk of bill shock. On the downside, there are some severe limitations, especially for iPhone users, and those wishing to make international calls. This is also not a suitable mobile solution for business users, or anyone interested in utilising the newest 4G speeds.
Overall, however, it provides the kind of value that Australian mobile users have so far been denied. It will be interesting to see what other offers follow from other budget providers.