2degrees takes Telecom to task over advertising

AUCKLAND – 13 November 2009

2degrees takes Telecom to task over misleading advertising

2degrees Mobile has written to Telecom requiring it to withdraw from circulation its newly issued Telecom Discover Brochure Nov/Dec 2009 and Telecom Discover Prepaid Brochure Nov/Dec 2009. 2degrees considers certain claims made in the Brochures to be misleading and deceptive, and in breach of both the Fair Trading Act 1986 and Codes published by the Advertising Standards Authority.

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.

2degrees Chief Executive Officer, Eric Hertz says that contrary to Telecom’s claims, 2degrees customers pay less and often only a fraction of that paid by Telecom One Rate Prepaid plan customers.

This is supported by the Commerce Commission Telecommunications Market Monitoring Report published 12 November 2009 where it states “For the first time in the Commission’s analysis, a New Zealand prepaid plan is priced at less than the OECD average. The 2degrees plan is significantly cheaper than the other New Zealand plans and below the OECD average for prepaid plans for all the baskets.

“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.

2degrees will be lodging a formal complaint with the Advertising Standards Authority over Telecom’s claims.

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