Telstra takes Optus to court over 'misleading' ads

Telstra has taken Optus to court in response to what it claims is a “misleading” advertising campaign launched by Optus late last year.

Optus claims in the advertisements, currently running Australia-wide, that there is less than one percent difference between the geographic reach of both telecommunications networks, and touts its own ‘smaller’ excess fees over Telstra’s for a comparable $60 monthly plan.

Telstra today filed an urgent injunction against Optus running the ads in the Victorian Supreme Court. A hearing will be held next Wednesday.

In its submission to the state supreme court, Telstra said Optus’ claims that its own network covered 98.5 percent of Australia compared to Telstra’s 99.3 percent were inaccurate, and it had suffered "loss and damage" as a result.

“Optus has made ... representations to the Australian public  … that the difference between the geographic coverage of the Telstra mobile network and that of the Optus mobile network is minimal and insignificant," the submission read.

“The representations are false, misleading and/or deceptive.”

It said Optus’ network only reached 1 million square kilometres - a “material and substantial” difference from its own 2.3 million square kilometres of coverage.

The submission argued that Optus’ claims represent a contravention of Australian consumer law and the Competition and Consumer Act. 

According to Telstra, Optus refused to comply with a letter sent by Telstra yesterday asking for the advertisements to cease immediately, resulting in court action taken by the telco today.

Telstra has demanded Optus retract the advertisements and order its staff to stop making the representations to customers. It also wants Optus to pay its legal costs. 

"In their latest TV commercial they have tried to create the impression their network coverage is, to quote their words, “less than 1 percent” smaller than Telstra’s," Telstra said in a statement.

"This is plainly false. The difference in geographic coverage is literally many hundreds of thousands of square kilometres. It’s a reality anyone venturing beyond cities or using their phone in back bedrooms and car parks understands."

Optus said the 1 percent claim in the advertisement refers to the population, as opposed to geographic, reach of both networks, despite the visual graphic of the ad including a map of Australia.

Vice president of corporate and regulatory affairs David Epstein said Optus had been "consistent and transparent" in how it communicated the population reach of both networks and it would "defend this position".

Update: Optus has agreed to remove the advertisement from YouTube pending the result of Wednesday's trial, but it successfully argued against pulling the TV ad.