Telstra is seeking an injunction in the Victorian Supreme Court, ordering Optus to pull the advertisements that have been running since about January 28.
Telstra claims that Optus' ads could mislead customers into believing Optus and Telstra's mobile networks cover 98.5 percent and 99.3 percent of the Australian land mass respectively.
Telstra said that in fact its network covered 2.3 million sq. km, or 28 per cent of the Australian land mass, at February 6, while it said Optus' network could only reach 1 million sq. km.
A spokesman for Telstra said the difference was important, as ''anyone venturing beyond cities or using their phone in back bedrooms and car parks understands''.
Lawyers for Optus told the court the language used in the ads is central to the issue and the company disputes the claim. But it has agreed not to make any more ad bookings and to remove the ads from its Web site temporarily.
The case will be heard this week.