Kogan targets former Smart50 entrant in court battle over mobile services

Outspoken tech entrepreneur Ruslan Kogan is targeting his company’s internet service provider, a former Smart50 entrant, following recent controversy surrounding users of his Kogan Mobile subsidiary who were reportedly being cut off from the service.

Kogan appeared in the Victorian Supreme Court this morning, as part of an attempt to stop ispONE from preventing users from recharging their accounts.

Kogan was contacted by SmartCompany this morning, but declined to comment. ispONE managing director Zac Swindells was also contacted, but was not available prior to publication.

The controversy began late last month, when a small group of customers complained they had been cut off from the Kogan Mobile service, which offers unlimited voice and texting services and 6GB of data every month. The customers found they were unable to recharge their accounts.

Kogan said at the time users were subject to the company’s acceptable use policy, which was set down by the ISP – ispONE – not Kogan itself. That policy provided that ispONE could cut off users if they used too much data in a specific time frame.

Kogan is reportedly arguing ispONE is responsible for cutting off the customers and wants that to stop.

“The plaintiff (Kogan Mobile) seeks … an injunction that the defendant (ispONE) be restrained from refusing to permit or otherwise preventing end users … maintaining their mobile telephone services by recharging their prepaid mobile services,” the writ says, according to BRW.

There is a disconnect in how the two companies operate; while Kogan pays for data per user, ispONE is charged for actual usage. Excessive usage can be a large financial dent.

Kogan has been the target of criticism over the customers who have been denied from reopening their accounts, with users on the popular Whirlpool forums complaining about the incidents.

ispONE is a former Smart50 entrant, having ranked 20th in the 2010 awards. The two founders, Swindells and Chris Monching, built the company by acquiring a smaller telco.

Most recently, the company recorded massive growth, growing from $30 million revenue to $60 million in 2011-12.