Thursday, 12 June 2008 12:59

iPhone 3G: Telstra slams Optus over allegedly misleading 3G claims

Exclusive: Telstra has seriously questioned Optus statements over its 900MHz 3G network, saying it is “concerned that Optus may represent to customers that they can enjoy a range of 3G features and services... [but that those] features and services will not be available if the 3G device is incompatible with Optus’ 3G 900 Mhz network”. Although Telstra didn’t mention the iPhone 3G, the timing coincides with recent comments from Optus CEO Paul Sullivan.

From analyst firm Ovum warning rural and regional Australians that an iPhone 3G from purchased from Optus or Vodafone will not work in 3.5G HSDPA coverage serviced by 900MHz towers, through to our own questions on the matter in an article yesterday, through to much other similar media concern, questions remain over the iPhone 3G merely being the iPhone 2G for some Optus and Vodafone customers.

Part of this potential scandal has emerged thanks to comments by Optus CEO Paul Sullivan who, in a joint press release with Apple Australia announcing launch of the iPhone 3G, who said: “iPhone 3G is the handset Australians have been waiting for.”

Sullivan continued: “With Optus, more iPhone users can enjoy 3G services as we expand our network to 96 percent of the population by December 2008 and 98 percent by December 2009. We look forward to providing our unique services and content to consumers and business customers via this outstanding handset.”

In a previous article, iTWire asked “How exactly will around 40% of people in rural and regional areas people soon to be enabled with 900MHz 3.5G be able to take advantage of “enjoy[ing] 3G services” when the iPhone won’t work in the 900MHz frequency?”

Now Telstra has decided to pounce and warn Optus it is wondering the same thing, with Peter Taylor, Telstra spokesperson saying: “A lot of new devices are now supporting 850 and 2100 frequencies as many carriers around the world follow in Telstra’s footsteps after the launch of the Next G network.”

Taylor continued: “It’s important that consumers understand when they are choosing their mobiles that some of these new phones simply won’t work properly on other frequencies like 900”.

Taylor ended by saying that: “Just this week Singtel Optus’ CEO was claiming a new mobile would operate on its proposed 3G network but failed to mention it was on the wrong frequency. It’s like someone claiming they can get cable TV without a cable.”

Although Taylor has put it lightly, it’s a different story when the legal eagles get involved, and iTWire has received a copy of a faxed letter sent to Ms Trudi Bean, Corporate Counsel of SingTel Optus Pty Ltd, which is re-printed in full on the next page.

Please read on to page 2.

When you read the letter, you’ll see that Telstra hasn’t mentioned the iPhone 3G once, but simply mentions ‘3G devices’.

Whether this is to avoid enraging Apple Australia is open to question, as Telstra is still not signed up to resell the iPhone 3G, and may be preparing to unleash an onslaught of iPhone clones in response, although that would likely see Telstra customers wanting an iPhone 3G being quite disappointed.

However “the fat lady hasn’t sung” so whether this is just Telstra the 800-pound gorilla throwing its weight around before announcing the iPhone 3G anyway is yet to be seen.

So, what follows is a re-print of a faxed letter Telstra sent to Optus a short while ago, which we received a PDF copy of:

Ms Trudi Bean
Corporate Counsel
SingTel Optus Pty Ltd
1 LyonPark Road
Macquarie Park NSW 2113

Dear Ms Bean

Optus 3G network and handset compatibility

I refer to Optus' press release on 7 May 2008 in which Optus announced that the planned expansion of its 3G network would be achieve using the 900 Megahertz (MHz) spectrum utilising High Speed Pack Access (HSPA) wireless broadband technology. Optus states that it would “embark on an investment program to expand its nationwide mobile network beyond 96 per cent population coverage to reach 98 per cent.”

As you are aware, 3G devices operate on limited frequencies (the most common 3G frequencies in Australia being the 850 and 2100 MHz frequencies). As such, some 3G devices will be incompatible with Optus’ 900MHz 3G network.

Telstra is concerned that Optus may represent to customers that they can enjoy a range of 3G features and services with Optus using a 3G device and that they will be able to access those services in more places as Optus expands its network. However, in fact those features and services will not be available if the 3G device is incompatible with Optus’ 3G 900 Mhz network.

Telstra’s letter to Optus continues on page 3.

Telstra’s letter to Optus continues:

Telstra considers that any such representation amounts to misleading or deceptive conduct, or be likely to mislead and deceive consumers in breach of section 52 of the Trade Practices Act 1974 (Cth) (“TPA”), or otherwise amounts to a false representation in breach of section 53 of the TPA in relation to the quality of the service.

Telstra will continue to monitor Optus’ claims in relation to use of 3G devices on its 3G 900MHz network, and will not hesitate to take such action as is appropriate.

Telstra reserves its rights.

Yours sincerely,

Jennifer Crichton
General Counsel
Telstra Consumer Marketing and Channels
Telstra Corporation Limited


iTWire has put a call in to Optus Corporate Communications for a comment on this letter, and await a reply, which we’ll include in a follow up story.

Curiouser and curiouser... and fascinating to see Australia’s telcos slug it out!


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Alex Zaharov-Reutt

One of Australia’s best-known technology journalists and consumer tech experts, Alex has appeared in his capacity as technology expert on all of Australia’s free-to-air and pay TV networks on all the major news and current affairs programs, on commercial and public radio, and technology, lifestyle and reality TV shows. Visit Alex at Twitter here.



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