Telecom Mobile fined $10,000

By PETER GRIFFIN

The telecom industry's run of illegal advertising has continued, with the Commerce Commission slapping a $10,000 fine plus costs on Telecom Mobile.

In the Wellington District Court yesterday, Telecom pleaded guilty to two charges of breaching the Fair Trading Act in a case that has been working its way through the system since late 2001.

Both charges applied to national advertising campaigns Telecom used to try to lure existing 025 and Vodafone customers onto its more advanced 027 mobile network.

In one case a deal for a Kyocera phone and contract plan was found to be misleading because only Telecom customers on the Anytime monthly plan or whose contracts had expired were eligible for the deal.

The second charge related to a claim that mobile users defecting from Vodafone and TelstraClear would be entitled to 50 per cent off their peak-rate calls.

In reality only a limited number of people were eligible for the discount because the deal applied only to Telecom Mobile calls to other Telecom mobiles, not to land lines and rival mobiles. Telecom did not say that in the fine print.

The Commerce Commission, which initiated the case against Telecom Mobile, has telcos in its sights as it fields a large amount of complaints about the industry's advertising.

Last month TelstraClear was fined $3000 plus costs for misleading advertising. That followed a fine in February on TelstraClear for $5000.

The director of the commission's fair trading branch, Deborah Battell, said the speed with which telcos went to the market with deals often led to misleading claims.

"It's a very competitive industry and they are trying to get out competitive offers very quickly, which means that from time to time their compliance systems fail."

She would not comment on the relatively modest size of the fines dished out by the courts but said the positive result was that both TelstraClear and Telecom had been prompted to significantly overhaul their compliance systems.