Andrew Heathcote Rich Lists editor

Andrew is BRW's Rich lists editor and is responsible for the Rich 200 and Young Rich flagship issues. He also reports on matters relating to wealth and investment for BRW and The Australian Financial Review.

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Kogan suffers first big failure after ispONE collapse kills off Kogan Mobile

Published 20 August 2013 11:38, Updated 26 November 2013 18:35

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Kogan suffers first big failure after ispONE collapse kills off Kogan Mobile

Ruslan Kogan’s empire will continue to grow, but the collapse of ispONE has effectively killed off his mobile division.

The collapse of ispONE following its dispute with telco giant Telstra is devastating news for tech entrepreneur and Young Rich list member, Ruslan Kogan.

Kogan entered the mobile phone market in December 2012. He described it at the time as a market that was “ripe for disruption”.

Customers were attracted to Kogan Mobile by the provision of Telstra 3G services, which he bought from wholesaler ispONE.

But last week Kogan was forced to write to Kogan Mobile customers warning that their services might be affected by the fight between ispONE and Telstra, who were battling over fees and contract conditions.

“Kogan Mobile is doing everything it can to protect its customers,” the letter to customers said.

However, the structure of Kogan’s deal with ispONE meant there was a limit to what Kogan could do for its mobile customers.

Unlike ispONE’s other big customer Aldi, Kogan Mobile doesn’t have a direct supply arrangement with Telstra and customers will be forced to switch providers within a month.

For Kogan, the collapse of ispONE gives him his first big failure. Fortunately, his mobile phone business is self-contained and the rest of his empire is still performing well.

Kogan has informed customers that he is “devastated” by what has happened. He sees the blame lying at the feet of Telstra and ispONE but it remains to be seen whether his customers – who signed contracts with Kogan Mobile and not the other companies – will be satisfied by this argument.

Kogan’s family is right behind him, at least. This morning he tweeted: “Got this email of support from mum last night. It’s the first time in my life that I’ve seen/heard her swear.” The screenshot of the email from Irene Kogan contained two words: F...k Telstra.

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