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Telecommunication Wars Hit Australia: Telecom and Optus Fight for Share As Court Battle Heats Up Over Ads By Penny Warnefor

CANBERRA – The attempts by the government-owned phone company, the Australian and Oversea

Just six months after privately owned competitor Optus introduced its services, the AOTC has been accused of misleading and deceptive marketing by the country’s advertising watchdog, the Trade Practices Commission.
The commission has launched legal proceedings in the Federal Court against Telecom (AOTC’s trading name) over three press ads created by DDB Needham Melbourne, which appeared last November and December.
The ads compare Telecom’s and Optus’ pricing – the focal point of competition since the two companies started battling last year. Optus has flaunted low rates to seduce the target share of 30% of the national mobile and long-distance markets it hopes to win by 1997. Meanwhile, Telecom has fought to retain customers by slashing its prices under direction of two Americans, chief executive Frank Blount (ex-AT&T) and marketing director Charlie Zoi (ex-Bell South).
The TPC took the action against Telecom after investigating complaints from Optus about the three ads. If the TPC is successful, Telecom will have to stop running its present ads and publish ads correcting deceptive claims.
Optus’ complaints are also being investigated by telecommunications watchdog Austel, which could force Telecom to revisit its marketing strategy if it upholds the complaints.
Penny Warneford is news editor with AdNews in Sydney.
Copyright Adweek L.P. (1993)