Telstra has been busted by the Federal Court for misleading consumers and the press about the coverage range of its new wizz-bang Next G mobile network, with the Australian Comsumer and Competition Commission (ACCC) claiming the advertising slogan “coverage everywhere you need it” is bogus.
The ACCC originally brought proceedings against Telstra in September, alleging that the telco has engaged in “misleading or deceptive conduct” by representing its wireless service in such a way.
Not only this, but the ACCC also claimed that Telstra has mislead by claiming that consumers would get the same or better coverage using Next G as they has previously on the CDMA network.
Yesterday, evidence provided by Telstra’s technical experts revealed that coverage on the Next G network was limited by a variety of factors including terrain, physical structures and handset selection, says the ACCC.
Though Telstra did not disclose information that these circumstances could limit Next G coverage, the ACCC says it also didn’t make the information redily available, and customers could not have inferred the truth from Telstra’s marketing.
Bad Blue Tick
Telstra’s ‘Blue Tick’ program, introduced in July 2007, which rates handset performance, was also cained by the authorities.
The Blur Tick program identified handsets with superior performance and range, including Telstra’s Country Phone.
Justice Gordon said the program was “inconsistent with and demonstrates the misleading and deceptive character” of the earlier advertisements. In addition, Telstra continued to run advertisements for Next G without explaining to consumers the differences between handsets, even after the Blue Tick program was launched.
“[The Blue Tick program conveyed] the representation that a person [could] use the Next G network regardless of where the person was, what handset that person was using and whether that handset had an external antenna attached,” said Justice Gordon yesterday.
“In fact, whether a user could obtain coverage depended in part upon where that person was, what handset that person was using and in some cases whether that handset had an external antenna attached.”
Telstra has been caught with breaching sections 52, 53(aa) and 53(c) of the Trade Practices Act 1974.
ACCC Chairman, Graeme Samuel, is now warning all telecommunications companies should ensure, when promoting the coverage of their services, that claims reflect “real-world” experience.
“In light of today’s judgment, the ACCC urges consumers to raise any concerns about poor Next G coverage performance or unsuitable handsets with Telstra. The ACCC considers that it is incumbent on Telstra to provide relief to consumers who have been misled into purchasing Next G handsets and services which do not deliver the promised coverage performance,” he said.
Telstra will now be forced to provide corrective advertising, says the ACCC, and the government body will crack down on other telcos making further similar representations.
The case was part of the Federal Court’s new fast track list which allows rulings to be handed down quickly — in this case less than three months after proceedings were instituted.