ACMA has come under scrutiny on its new Telecommunications Consumer Protections (TCP) Code with Telcoinabox CEO, Damian Kay, saying it treats consumers like idiots and adds unnecessary compliance burden on smaller resellers.
“One of the first things consumers do is compare price before making a formal decision on their telecommunications provider,” Telcoinabox CEO, Damian Kay, said. “Consumers are not idiots they do not need a Code to tell them to do what they already do. “I think we’re going down a nanny state path by treating the consumer like this.” Kay said the TCP code stamps out competition because the requirement on small resellers was unrealistic and added another barrier for new entrants to the market.
Kay referred to the initial front end charges to comply with the new code, which includes legal, billing systems, marketing and customer notifications costing up to $50,000 and then about $10,000 for every year afterwards. “In addition, it binds them up in more red tape taking away their time from servicing their customers and marketing for new ones,” he said. “For a wholesale aggregator like us, we have size and scale and can provide the guidance, service and templates to comply with the TCP code. But what does the small reseller do?”
Kay highlighted the recent Kogan fiasco has unfortunately given the newly introduced TCP code credence when it wasn’t needed.
Kogan has been embroiled in a court battle with ISPOne, claiming wholesale agreements were breached after 600 Kogan Mobile customers were suspended for using too much data or making too many phone calls.
ISPOne hit back saying Kogan engaged in misleading and deceptive conduct through claiming the mobile phone plans were unlimited.
Telcoinabox does provide TCP Code services to enable retail service providers to manage their compliance burden.
It provides guidance and materials, such as training and regular updates to identify key regulatory issues for resellers, including the TCP Code; templates and suggested operating procedures which RSPs can use as the base for their own compliance programs; website design and a range of product collateral providing assistance with the compulsory disclosure required by the TCP Code; billing and CRM systems which are updated to comply with regulatory requirements as they are known and discounted purchase arrangements for third party specialist suppliers (such as regulatory advisers) to advise RSPs as needed.
Kogan Mobile has landed the first blow against its telco wholesaler, ispONE, setting up what could potentially be a messy legal battle. The online retailer turned telco, has won an injunction that will stop ispONE from interfering – and disconnecting – customers from its service. And it’s now looking to have ispONE fulfil the rest of its contract and supply it with enough micro and nano SIMs to sustain its business.
Final adjudication on that point is going to be tough for the Victorian Supreme Court; looking at the whole picture, it’s hard to see who really is to blame.
Consumers are angry at Kogan, because it seems he has overpromised and under delivered. When customers order a plan with “unlimited” services they expect unlimited services. Kogan Mobile’s already feeling the wrath of excommunicated customers and has started offering them compensation in the form of $50 vouchers for his online store.
Meanwhile, Kogan is equally livid at ispONE for disconnecting high-use customers without its permission. And then, the wider telco industry is furious at Kogan for dragging the virtual telco industry’s name though the mud after years of trying to redeem its image. ispONE is yet to comment.
And perhaps some of the blame could even be pinned on Telstra, as its existing arrangement with ispONE, may have forced its hand in cutting off Kogan’s users.
A curious dynamic
The whole situation hints at the rather curious – and not widely talked about - dynamic between MVNO’s and wholesalers.
Spats between the two aren’t uncommon, but we usually don’t hear much about them given that most of the jousting is about ironing out contractual disagreements.
The high profile nature of Kogan’s mobile woes has dragged this case into the spotlight, but telecommunications consultant and analyst Tony Simmons says that this won’t make any difference as to how it’s sorted out – the judge will pour over the contracts and determine who is in the right.
“In my mind, this is contract issue, with some cowboy behaviour somewhere along the line, and someone overreaching and now being pulled back into line, but it is all contract,” Simmons says.
But a simple contract reading might not lead to a resolution. As Simmons explains, Telstra’s involvement in the matter complicates things.
“Telstra and any other originating wholesaler will have a pretty tight contract and this will set out what ispONE can and can't do and what is a breach of contract,” Simmons says.
“So ispONE may be cancelling the services so that they are not in breach with Telstra, but they may not have the right with Kogan to cancel these services.”
“The sad part is, there are consumers who are the innocent bystanders in this who are having their services cancelled and they may or may not be doing anything in breach of their terms and conditions.”
The fact that consumers are getting burned by this mess has raised the ire of Damien Kay, the CEO of wholesale telco provider Telcoinabox. He says that this high profile situation could damage the credibility of the telco industry, and lays the blame purely at the feet of Ruslan Kogan.
“I worry about entrants like Kogan into the industry… [He’s] giving the punters out there an un-realistic understanding of what the real price of producing service is,” Kay says.
“Who wears this risk? Customers get burned and telco becomes a dirty word again.”
“We spent, three, four, five years after [the collapse of] One.Tel, building the industry image up and then idiots like this go and destroy it again.”
Kay believes that there wouldn’t have been a problem if Kogan had set reasonable bundles for a fair price.
“The whole supply chain has to be profitable. If it is not profitable, it will eventually go under,” he says.
His points about pricing and the profitability of the entire supply chain will no doubt be revisited as more companies look to the MVNO space as viable add-on business. Pricing will be a key factor in how these emerging players compete in this crowded market.
Win or lose, Kogan’s situation will also spur debate in the MVNO market. It will also be interesting to see whether the regulator - the Australia Media and Communications Authority – gets involved in the matter.
As far as the entire industry’s reputation is concerned, many will be hoping Kogan’s current situation will serve as example for future players on the perils of being a virtual telco.
What Telcoinabox CEO Damian Kay had to say about the future of the telco reseller and aggregator industry....
Full presentation of CEO Damian Kay's view on the future of telco resellers and the aggregator industry at Comms Day Summit - Click link below
Telcoinabox’s Damian KayPresentation Transcript
- 1. Resellers, Aggregators and the FutureComms Day Summit – 10 April
- 2. So, what is a reseller? Telecommunications resellers provide fixed, mobile and data telecommunications services over third-party-owned networks. They simply buy and resell telecommunications services. Telecommunications Resellers in Australia: Market Research Report - 2012
- 3. But it‟s confusing Is it: Tier 2, Tier 3 or something In-between?
- 4. In our opinion the definition is... TIER 1 Infrastructure owners on a large scale Small infrastructure players, including regional wireless TIER 2 players and aggregators. Revenue typically > $50M. Includes major multi-national telcos Resellers Tier 3 Smaller SPs, reliant on Tier 1 and Tier 2 for services Source: Telcoinabox in collaboration with Market Clarity
- 5. The tier 3 market 800 Number of Tier 3 providers 700 600 500 400 300 200 100 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 ISPs 659 678 638 529 484 473 475 500 520 VSPs 369 413 436 349 312 341 345 360 380 Voice Service Providers include fixed voice, VoIP and mobile Source: Market Clarity
- 6. “Pure” tier 3 telcos in Australia today Source: Market Clarity
- 7. Telco dealers
- 8. Getting Shafted
- 9. Customer ownership
- 10. The rise of the “non-traditionals”
- 11. Bolting-on telco as a new revenuestream
- 12. Will this mean market saturation?
- 13. We will see carrier churn accelerate
- 14. Why will the new kind of „reseller‟thrive?Trusted brandsExisting large scale customer baseBig revenue driversOffer better customer experienceOffer value for money
- 15. But wait, there‟s more…
- 16. What is driving demand?
- 17. Under the spotlight
- 18. Tip of the iceberg
- 19. How do they become a reseller?
- 20. The ideal aggregator Breadth of products / services – a “one-stop- shop” Ownership / control of core Customer focused – network assets trusted, open, transparent Scale – Ability to Invest & Experience & expertise – Grow proven track record Does not compete with its customers Aggregator Completely “white label”
- 21. So in summary• NBN will drive new Tier 3 entrants into the market• A greater role for aggregators as they become more relevant• Plethora of unprecedented demand by RSPs
- 22. So what are our plans to managethe demand?The Inabox Group after acquiring the business of Telcoinabox is going to IPO in June 2013
- 23. Questions www.inaboxgroup.com.au
Full-service telecommunications wholesale aggregator, Telcoinabox has spent the last 12 months gearing for growth to service the escalating demand among individuals and non-traditional telecommunications businesses to become their own telco. The company has invested over $1 million in network and systems upgrades, new product launches and hiring 20 new staff at the Australian and New Zealand Operations Centre (ANZOC) to meet the demand
Over the past year 60 new retail service providers have signed with Telcoinabox to become their own phone company, half of which were ex-telco dealers.
“Telco dealers need just as much telco specific infrastructure support as any start-up or non-traditional telco starting out in the industry,” says Telcoinabox CEO Damian Kay.
“Telco dealers are used to selling plans for other carriers and now they can own their own customer. We have replicated that model as close as possible to allow them to do what they do best – sell,” he adds.
The model simplifies their business operations as they can turn to a ‘one-stop-shop’ provider that manages the relationships with carriers and supplies a complete end-to-end back office solution, including customer support, billing and provisioning.
The other new retail service providers that have signed with Telcoinabox this year include a mix of systems integrators, managed service providers and existing businesses with large customer bases looking to add telecommunications to their businesses.
The micro-acquisition strategy that was launched early 2011 to help Telcoinabox’s existing customers grow their businesses through acquisition has taken an unexpected twist this year.
“We are pleased to announce that some of our takeover targets have opted to become Telcoinabox retail service providers instead.
“It says a lot when an existing retail service provider changes supplier relationships and migrates their billing system to ours.
“In our view this is a strong indicator that the market acknowledges the profit-making potential in creating a business in telecommunications. We appreciate that NBN has a lot to do with this trend,” said Telcoinabox CEO, Damian Kay.
Systems upgrade and new contract signings
The company’s largest internal infrastructure development project is now complete. The network has been upgraded with Multiprotocol Label Switching (MPLS) capability and has now been extended into New Zealand allowing Telcoinabox to offer advanced Trans-Tasman telco solutions.
In addition, the network capacity is now quadrupled increasing the support for thousands of new customers.
Fixed line and DSL bundles have also been launched to the Australian market which are competitive against unbundled local loop (ULL), Line Spectrum Sharing (LSS) and naked DSL offerings.
New agreements have been signed with Telstra to resell Telstra’s new wholesale products including 3G Mobile and business grade SHDSL. This will be launched to service providers next week.
Telcoinabox has also signed agreements with new carriers last month, AAPT, to supply Midband Ethernet, including IPLine (internal business lines) and Elines (external business lines) and Soul to supply to Ethernet First Mile (EFM).
“By adding new carriers to our wholesale carrier mix allows us to broaden our product profile as well as give retail service providers’ customers more choice to pick and choose the best product mix that fits their telco needs and price points,” says Mr Kay.
This month new Optus mobile plans were launched along with wireless broadband. Telcoinabox will announce more carrier deals later this year.
ANZOC currently has 80 staff members to support the infrastructure and its system developments, manage service providers and relationships with carriers.
For comment, please contact: Telcoinabox CEO Damian Kay on 0413 888 655. For information, contact Andreina Amato 0410 434 227.About Telcoinabox Established in 2002, Telcoinabox is a telecommunications wholesale aggregator which provides an end-to-end ‘in-a-box’ solution to 160 individually branded retail service providers (RSP) across Australia and New Zealand. Customers include start-ups, system integrators, managed service providers and non-traditional telcos that want to add telecommunications to their existing businesses. Telcoinabox manages the relationships with carriers (Telstra, Optus, AAPT, Soul, Engin and NBN) on behalf of its customers - the RSPs - and provides telecommunications products (fixed line, mobile and data) and white-label back-office services including customer support, billing and provisioning. By outsourcing to Telcoinabox RSPs are free to focus on marketing, sales and account management. www.telcoinabox.com.au
THE 23rd annual Telcoinabox Airlie Beach Race Week is now just one week away and excitement is building as boats and competing crews arrive in town. The famous sailing regatta is due to kick off next Thursday with a welcome function for participants at the Whitsunday Sailing Club. Racing officially starts at 11am on Friday August 10, with the Double Cones/Armit race
THE 23rd annual Telcoinabox Airlie Beach Race Week is now just one week away and excitement is building as boats and competing crews arrive in town.
The famous sailing regatta is due to kick off next Thursday with a welcome function for participants at the Whitsunday Sailing Club. Racing officially starts at 11am on Friday August 10, with the Double Cones/Armit race.
More than 100 competitors have already registered to race, with organisers predicting that the 2012 Performance Racing Division will be amongst the strongest yet. Traditionally, this division has been hard fought with the Whitsunday Sailing Club fleet proving tough to beat.
This year's regatta boasts very strong local representation including Leo Rodriguez' Volvo 60 Merit, Craig Picininelli's Wobbly Boot, Charles Wallis' MBD 41 Reignition, Rod Sawyers Norlin 37 Surefoot, Jeff Brown's Northshore 38 007, Mike Keyte's Beneteau First 40 Take Flight, Kevin Fogarty's Beneteau 40.7 Twister and Graham Jiggins' Adams 10 Grizzly all amongst the early entries.
These Whitsunday sailors will be doing battle with some of the top guns on the Australian racing scene, including former Cruising Yacht Club of Australia (CYCA) commodore Matt Allen's new Farr 400 Ichi Ban, and John Bacon's McConaghy 38 Dark Star.
Bacon, who returns to race week after winning overall honours in IRC Cruising in 2004 and the premier Cruising Division in 2007, said he was very much looking forward to the 2012 event.
"Airlie Beach Race Week as far as we are concerned is one of the very top events on the Australian circuit. The classic Whitsundays winter weather, the lovely 20 knots trade winds... it's a sailing treat," he said. Telcoinabox Airlie Beach Race Week is followed by the Whitsunday Reef Festival from August 16-19, Great Whitsunday Fun Race on Saturday August 18 and Hamilton Island Race Week from August 17-25.
For more information on racing at Airlie visit www.airliebeachraceweek.com.au.
Whitsunday Times 02-Aug-2012
Telco Together Foundation launches at the 2012 ACOMM Awards, uniting telcos to collaborate on solutions to social problems. Sydney – 9pm Thursday July 27th, 2012; A new industry-wide charitable organisation, focused on disadvantaged communities, (the Telco Together Foundation) was launched by Senator Stephen Conroy this evening, at the telecommunications industry’s prestigious ACOMM Awards, held in Sydney
Sydney – 9pm Thursday July 27th, 2012; A new industry-wide charitable organisation, focused on disadvantaged communities, (the Telco Together Foundation) was launched by Senator Stephen Conroy this evening, at the telecommunications industry’s prestigious ACOMM Awards, held in Sydney.
Uniting telcos to create a unique and wide reaching platform for social change by drawing on the industry’s core capabilities, strengths and access to technology will be the cornerstone of the Foundation’s vision.
Endorsed by the Australian Government Department of Broadband, Communications and the Digital Economy, the Telco Together Foundation has received strong support from industry leaders, including NBN Co Chief Executive Mike Quigley, who has been appointed Chairman of the Foundation’s Advisory Board.
“I am thrilled to be a part of this member-driven Foundation offering an exceptional opportunity to promote a culture of philanthropy across the industry,” said Quigley, commenting on the announcement.
“Fostering the development of telco-generated initiatives to advance social welfare is a very exciting prospect with endless potential. I welcome and encourage telecommunications and information technology entities across the industry to get involved,” said Quigley.
At the gala awards event, Chairman of the Foundation’s Board of Directors and its founding benefactor, Vaughan Bowen, (who was nominated for the 2012 Communications Ambassador award), accepted a letter of endorsement from Senator Stephen Conroy, congratulating him for his visionary work and dedication to getting the Foundation off the ground.
“The Foundation is a fully compliant, not-for-profit entity with no affiliation to any one telco. Its sole purpose is to foster positive social outcomes and coordinate the use of telecommunications technology to promote and increase giving across
Australia. It is a very exciting opportunity for our industry to take a leadership position in the delivery of sustainable improvements to disadvantaged communities,” said Bowen.
The Telco Together Foundation proudly launches with ten founding members –Optus, Vodafone, NBN Co, Dodo, M2, AAPT, Community Telco, Eftel, Telcoinabox and Vocus - and has received generous support from a variety of Australian organisations including Deloitte Australia, Brentnalls SA, ADMAD, Web105 and The Virtual Network.
Renee Bowker, Chief Executive Officer of Telco Together Foundation, said; “I am so pleased to have received such a positive response from the industry, and to confirm that the Foundation has already secured a number of founding members, including industry leaders, while being in discussion with numerous others.”
“Although many telcos already have very effective CSR projects in place, the Foundation represents a unique opportunity to focus on initiatives that require industry-wide collaboration in order to be successful,” she said.
As an industry with annual revenues of $40 billion and over 25 million direct customer communications made monthly, telcos are in a unique position of collectively having a relationship with almost every business and consumer in Australia. By taking advantage of these characteristics and gaining access to the 70,000+ people employed by the industry, an exceptional opportunity for the Telco Together Foundation to become a massive vehicle for social change exists.
SOLO round-the-world sailor Jessica Watson is lending her star power to the 23rd annual Telcoinabox Airlie Beach Race Week from August 10-16. The 2011 Young Australian of the Year and nation's most famous teenage sailor will be sailing with friends during the regatta and will also attend a couple of social events.
SOLO round-the-world sailor Jessica Watson is lending her star power to the 23rd annual Telcoinabox Airlie Beach Race Week from August 10-16.
The 2011 Young Australian of the Year and nation's most famous teenage sailor will be sailing with friends during the regatta and will also attend a couple of social events.
Tourism Queensland's destination director for the Whitsundays Racheal Klitscher said this was the third year of TQ's partnership with Jessica Watson as part of Queensland's Season of Sailing campaign.
"Jessica's participation in Airlie Beach Race Week will undoubtedly contribute to the growing profile of one of the Whitsundays most important events, and continue to reinforce the Whitsundays and Queensland as the home of Australia's best sailing experiences," she said.
Whitsunday Sailing Club commodore Rob Davis said the race week committee was proud to welcome Ms Watson to the event.
"People all over Australia are seeing the race week as an increasingly important regatta to go to and having Jessica here is another feather in its cap. We sincerely hope she enjoys her involvement in the regatta and decides to make it a regular event," he said.
Ms Watson, whose most recent challenge was a high-heeled contest in "Dancing with the Stars" said she was looking forward to getting back on the water and visiting Airlie Beach.
"Winter is such a great time to be sailing on the Queensland coast and it will be great to do some sailing with friends and enjoy the festivities at Airlie Beach Race Week," she said.
"Airlie Beach Race Week has always been one of those iconic Queensland regattas that I have always wanted to participate in.
"It's always great to sail in the beautiful Whitsundays."
Following on from the Airlie Beach event is Hamilton Island Race Week from August 17-25.
Here the glitz and glamour is set to continue with off-water appearances by the likes of fashion designer Collette Dinnigan, television presenter Catriona Rowntree and celebrity chef Kylie Kwong.
Whitsunday Times 12-Jul-2012
THE man behind the naming rights to the 2012 Telcoinabox Airlie Beach Race Week was in town this week for a short visit prior to the big event. Telcoinabox managing director Damian Kay brought his wife Natasha and children Ethan (7), Lachlan (5) and Callum (1) on a holiday to Airlie Beach where they stayed with Whitsunday Sailing Club Rear Commodore of Offshore Sailing Leo Rodriguez.
THE man behind the naming rights to the 2012 Telcoinabox Airlie Beach Race Week was in town this week for a short visit prior to the big event.
Telcoinabox managing director Damian Kay brought his wife Natasha and children Ethan (7), Lachlan (5) and Callum (1) on a holiday to Airlie Beach where they stayed with Whitsunday Sailing Club Rear Commodore of Offshore Sailing Leo Rodriguez.
Mr Kay, who previously sponsored Rodriguez' ocean racing yacht Merit in the 2008 Sydney-Hobart and 2010 Hamilton Island Race Week said taking on the naming rights to Airlie Beach Race Week would bring him good exposure and made "a lot of sense".
"This is about being seen. We're not a consumer based brand - it's more business to business and what you find in yacht racing is a lot of business people who are self-made or entrepreneurial so the naming rights really helps us to get that exposure," he said.
Mr Kay's definition of Telcoinabox is a company that enables anyone with a phone, internet connection and computer to be a telecommunications service provider.
"We ignite and fuel the entrepreneurial spirit. It's all about challenging yourself and it has a lot of synergies with sailing," he said.
This year, Mr Kay plans to bring about 20 Telcoinabox staff and customers to Airlie Beach to sail aboard Merit and participate in the event. "Getting my staff working together in a boat and socialising with their customers - it fosters really good relationships," he said.
Mr Rodriguez, who has enjoyed a long association with Telcoinabox, said their involvement in race week would be energising for the town.
"It is certainly a new beginning for Airlie Beach Race Week with a new sponsor and also in the way it's being run. The focus is on the town of Airlie Beach and the Whitsunday Sailing Club and this year we've asked for a lot more involvement from local sponsors so it's working out pretty well," he said. For more information visit www.airliebeachraceweek.com.
Whitsunday Times 05-Jul-2012
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