Telstra Found Guilty of Misleading Consumers

07 December 2007

MELBOURNE: Television, online and newspaper ads for Australian telco giant Telstra's third-generation NextG mobile phone service misled consumers by suggesting the network would be available across the whole country, a Federal Court judge has ruled.

Justice Michelle Gordon said the company "engaged and continues to engage in conduct that is misleading or deceptive" in using ads supported by taglines such as 'Everywhere you need it'.

She found the ads were misleading because they claimed NextG customers would receive equal or improved coverage to that of Telstra's existing CDMA network, due to be shut down in January.

In fact, said the written judgement: "Whether a user could obtain coverage depended in part upon where the person was, what handset that person was using and in some cases whether that handset had an external antenna attached."

The lawsuit was initiated by the Australian Competition and Consumer Commission, which was concerned the network would not be available throughout the country.

The watchdog cited 12 instances where Telstra made claims that were potentially misleading. It must now inform the judge of what sanctions should be taken against the telco.

Telstra may be forced to broadcast corrective advertising, just months after it was censured by the regulator over a previous set of TV ads, one of which featured the actor Dustin Hoffman.

Data sourced from Sydney Morning Herald; additional content by WARC staff