Telecommunications giant Telstra will appeal yesterday’s ruling by the Federal Court against its Next G mobile network regarding misleading advertising, claiming it has been “punished” by the ACCC for being forward-thinking with its superior mobile service, and hopes it competitors, including Optus, will also be caught by the government agency.
The Australian Comsumer and Competition Commission (ACCC) brought proceedings against Telstra in September for advertising pertaining to its new Next G network which claimed that it provided “coverage anywhere you need it” — a statement that ACCC and the Federal Court believe is misleading.
Yesterday the Federal Court ruled that Telstrs was breaching sections 52, 53(aa) and 53(c) of the Trade Practices Act 1974, by providing misleading or deceptive conduct by advertising its service in such a way.
“We intend to appeal this very disappointing decision. We stand behind our advertising and the network because we know that Telstra’s Next G network is the largest mobile network in Australia that provides coverage in more places in Australia than any other mobile network including the old CDMA network,” said Telstra spokesperson, Peter Taylor.
“Telstra has the handsets and the network that give our customers the best handheld coverage available in this country.”
The ACCC also nobbled Telstra for its Blue Tick program which rated mobile handsets on their performance, including Telstra’s Country Phone. According to ACCC, Telstra was not forethcoming with information to its customers that depending on the handset they use, they may or may not get better coverage on the Next G network.
“The ACCC’s case was based on evidence from just three out of more than 1.5 million Next G customers. In fact, one customer was singing the praises of the Next G network from the witness box,” said Taylor.
Telstra claims its customers are not silly — they understand advertising and do not expect Telstra Next G to provide access in every corner of the country. The company also compares its advertising to that of Vegemite, which has become an AUstralian advertising icon.
“Telstra gives its customers credit for understanding advertising. Do people really believe that Vegemite puts a rose in every cheek? By the same token, we never said the Next G network covered every square inch of Australia. The facts are that Telstra’s Next G network is 100 times larger than our competitors’ 3G networks, provides coverage to 400,000 more square kilometres of Australia than CDMA and is the fastest national mobile network in the country. That’s what our advertising says,” said Taylor.
“Most of the advertisements in question have not been used for months.
“This decision will not stop us telling customers just how good the network is and the benefits it brings to Australia.”
Taylor goes so far as to say he hopes the ACCC will also investigate the telco’s competitors for similar advertising of their 3G networks.
“We hope the ACCC is now investigating Singtel Optus, Vodafone and Hutchison ‘3’ for the way they promote their 3G services, given consumers will actually only get 3G coverage in less than 1% of Australia’s land mass,” he said.
“Telstra has introduced the first and only program in Australia that helps consumers select the best handset for their needs. It seems that we are being punished by the ACCC for having the best coverage and breaking new ground to help customers make informed choices.”