2degrees to file misleading advertising complaint against Telecom
ABOVE: the suddenly controversial Christmas brochure, still resident at a Dick Smith store off Auckland's Queen Street.
[UPDATED with Telecom response]
2degrees has asked Telecom to immediately withdraw a Christmas promo brochure called Telecom Buyers [sic] Guide: Discover Prepaid Nov/Dec 2009 and a lookalike effort called Telecom Discover Nov/Dec 2009.
Head of corporate communications Bryony Hilless told NBR that 2degrees also plans to file a complaint against Telecom with the Advertising Standards Authority “first thing Monday morning”.
The telco alleges both efforts breach the Fair Trading Act (1986), and ASA advertising standards codes.
No complaint will be made to the Commerce Commission "in this instance", Ms Hilless told NBR. "The ASA Advertising Codes contain similar provisions as the FTA re not misleading or deceiving consumers and we will rely on those in our complaint."
“In these brochures, under the heading ‘Why is Telecom XT better?’ Telecom either implies or claims that prepaid calls on 2degrees’ network cost more than calls made on Telecom’s One Rate Prepaid plan,” the company said in a statement.
Telecom spokesman Nick Brown told NBR that Discover "Simply states that with other providers charging by the minute rather than the second, pre-paid customers may be paying more than they think. It wasn’t a comparison of headline calling rates - simple as that."
Mr Brown added "Telecom is the only mobile provider to charge new prepaid customers by the second after the first minute of a call."
And for good measure: "It’s a little unusual that 2degrees has gone to the media rather than simply submit their complaint to the Advertising Standards Complaints Board - which is the more conventional way to manage these things."
BELOW: An excerpt from Telecom's brochure:
Still hanging around
NBR visited the Dick Smith outlet in Auckland’s Queen Elizabeth Square - scene of 2degrees’ August launch - where the allegedly offending Telecom brochure was still on display (the chain sells cellphones and service for the three main carriers).
A sales rep was unaware if any instruction had been handed down - or not - to remove the brochures.
On page 4, the brochure states: “Both Vodafone Spa Prepay and 2 Degrees round up to the next minute which means you may be paying a lot more for calls than you think, now that doesn’t seem fair”. (The grammar is Telecom's own, and begs a complaint to another authority.
2Degrees chief executive Eric Hertz responded in a statement this morning:
“Telecom provides a comparison to Vodafone in these Brochures but fails to provide a similar comparison to 2degrees. Telecom implies that 2degrees pricing may be more expensive and that its pricing may be unfair to customers. In fact, a full comparison would illustrate that consumers always pay less with 2degrees than on both Telecom One Rate Prepaid and Vodafone Supa Pre-Pay,” said Eric.
Mr Hertz pointed to the just-released Commerce Commission Telecommunications Market Monitoring report - which identifies 2degrees prepay plans as cheapest - as further evidence in his company’s favour.
Telecom had no immediate response.
Vodafone declined an opportunity to comment. The telco has long-maintained that any comparison should take in its on-set promotions, such as Best Mates, which offer steep discounts for calling a circle of friends on the same network.
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