There has been significant talk in the media and social media circles regarding Kogan’s apparent bait and switch tactics following the price rise of about 10% this week. As a longterm commentator of the prepaid mobile market, I firmly believe that a god portion of the customers that switched to Kogan are transient and really likely to move away just as easily as they moved to Kogan (easy come easy go no matter where they are). So whilst 110,000 customers is a major achievement, a good portion of it was because the price was ultra-cheap compared to the market and with the change, these same customers are likely to look at alternatives that offer less restrictions eg daily limits, a better network and better service. The prepaid market is fickle because it was designed to be that way.
The point of today’s article is that unlimited prepaid plans have dominated the market over the past 24 months and whilst they seem to offer great value, there is a cost that goes with using them beyond what is leaving your bank account.
What mobile phone companies do by giving us unlimited plans is condition us to use our phone more and more. Yes the more we use the less they make but over the longer term, you become used to using more and ultimately find that it is very difficult to use less. Should the price of unlimited gradually rise, you are stuck in an expensive situation with a lifestyle that demands more mobile use.
The phones themselves don’t help nor do the apps that are gradually allowing us to do almost anything from our mobile phone. Get used to using your phone for everything, get used to fast internet, use your mobile phone instead of your landline and the mobile carriers have us where they want us. The cost of supporting such growing mobile use should actually drive call and data costs down, but with only 3 carriers we could see a situation where they all gradually increase pricing.
Kogan with its 6GB of data even with the 400MB data daily limit is guilty of these tactics. Yes Kogan Mobile gives you greater value, but by giving you so much more than anyone else, you get hooked on using so much more. The price to pay for this usage pattern is the regular promotional emails Kogan sends to buy everything from their store and the risk of yet another price rise (maybe in 12 months time).
Given Kogan can make money from product sales through his online store, it is unlikely he would start a regular pattern of price rises but a 12 monthly review would certainly be on the cards.
On a 12 month basis, Kogan is about $150 less expensive than any of the 30 day expiry options. The 30 day expiry options are priced at $39 – $40 across the board. I wonder why they don’t offer a 12 month prepaid option. When Red Bull Mobile was offering prepaid plans, their 365 day options was $1/day at $365. For this you received 5GB/mth and your unlimited calls and TXT/MMS. This is the closest to Kogan that you can get. Aldi is another to consider with their $35/mth for 30 days options and 5GB on the Telstra 3G network (same network range and speed to Kogan). At $35 your annual charge would be $420. Dodo also had an unlimited offer at $39 with 5GB data and bonus data as well but this plan is being terminated at the end of August.
So if you are hooked on the unlimited offer, the only remedy I can recommend is a mobile phone detox which might see you leaving the phone in the draw in the kitchen rather than beside you bed every night.
Arthur Koulianos
www.prepaidplans.com.au
