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Friday, 07 February 2014 15:53

Telstra launches legal action against Optus Featured

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Australia's biggest telco Telstra has launched legal action against main rival Optus over its latest ad campaign, which allegedly contains misleading statistics.

Telstra has been granted an injunction in the Victorian Supreme Court, ordering Optus to take down advertisements it has been running since 28 January. They are part of a longer campaign comparing the difference between the two telco’s network coverage

Telstra alleges consumers are being misled by representations made by Optus about its mobile network coverage, including an allegation via television voiceover that “When it comes to the percentage of Australians the Optus mobile network reaches, there isn't much difference between us and Telstra. In fact it's less than 1%.”

Telstra sent Optus a letter on Thursday demanding the ads be taken down. Optus refused, which led to the court action. Optus has now agreed not to air the newer ads until the trial date, set for 12 February. But it successfully argued that it should be allowed to continue to run the older ads in the campaign, because Telstra had not previously complained about them and advertising spots had been booked.

Telstra said in the statement of claim in court that its network covers 2.3 million square kilometres, or about 28% of the Australian landmass, while Optus' network covers about 1 million square kilometres.

“The difference between the geographic coverage of the Telstra Mobile Network, and that of the Optus Mobile Network is material and substantial,” Telstra said in a statement.

Telstra is claiming that Optus is in breach of Australian Consumer Law in the Competition and Consumer Act, and that the telco has “suffered loss and damage” as a result.

Optus vice president of corporate and regulatory affairs David Epstein defended the advertisement, adding that the company had been “consistent and transparent” in its advertising about network sizes.

“Telstra is seeking an injunction regarding our recent advertising campaign in which they are challenging the visual representation of our reach metric in a specific advertisement,” he said in a statement.

“We have been consistent and transparent in how we communicate the less that 1% difference in the population reach of the Optus mobile network compared to Telstra's and we will defend this position.”

Telstra is seeking damages and court orders forcing Optus to publish corrective advertisements, declare that they have engaged in misleading or deceptive conduct and inform all new customers of their alleged deception.

On the surface of it, it appears Optus has a case. Its ads are based on the proportion of Australians who can receive Optus coverage compared to Telstra’s, while Telstra complaint appears to be based on the proportion of Australia’s land mass that can receive coverage.

It’s all a bit petty, really.

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