Optus chalks up advertising court victory over Telstra

Telstra's complaint about its rival Optus' advertising has been dismissed by Victoria's Supreme Court.

Optus has won a legal stoush over its "empires end" ads, with Victoria's Supreme Court rejecting Telstra's claims they amount to misleading or deceptive conduct.

The telco claimed Optus' use of the phrase wrongly implied it "undisputedly" operated Australia's best mobile network, but Justice Ross Robson was not convinced.

"I find that Optus' advertisement conveys the representation that Optus' mobile network is better than Telstra's, but not that it is 'undisputedly' better," the judge ruled on Wednesday.

He also overturned an interlocutory injunction granted two weeks ago, to stop Optus running the ads stating: "Empires end. That's what they do".

The ads also said: "The Optus Mobile Network has been ranked the best overall in voice and data", adding in fine print that this was backed by the P3 Mobile Benchmark in December 2017.

Justice Robson rejected Telstra's argument the ads conveyed that the relative market positions of the two telecommunications giants had undergone a permanent change.

"It would be fanciful to imagine that the humorous image of a Telstra phone box in a desert landscape would persuade a reasonable person that Telstra's strong position in the market has been permanently destroyed," the judge said.

The telco earlier argued the ads should be taken down from billboards in Queensland, New South Wales, and Victoria, as well as from websites, as they ran the risk of convincing ordinary Australians to sign up with Optus, because Telstra no longer had the best mobile network.

But Optus said Telstra's analysis of the ads was "miles away" from what they actually conveyed.

"The words 'empires end' conjure up historical references," Neil Young QC previously said.

"It's not saying anything about the demise or obsolescence (of Telstra). It's a historical jest."

Justice Robson ordered Telstra to pay Optus' legal costs.

"This is a disappointing decision and surprising given the Judge's original position," a spokesperson for Telstra said.

"Regardless of any advertising by our competitors, the fact remains we offer our customers Australia's largest and fastest mobile network and we connect millions more Australians than anyone else."

Optus managing director of product and marketing Ben White said the company was very pleased with the outcome, and would continue to invest and compete for customers.

"We believe Australians should know that Optus offers them a real alternative with an award-winning mobile network that delivers great value for customers," he said.

The decision on Wednesday follows a separate judgement in the Australian Federal Court last week that Telstra's "unlimited" mobile network advertising campaign was misleading and deceptive, and prevented Australia's incumbent telco from continuing them.

According to Justice Gleeson, Telstra's advertisements "falsely convey the representation" that the telco offers a mobile product with no limits on data speeds, data volumes, and the ability to download data without interruption or delay, misleading the public on the nature and characteristics of mobile products including the geographical reach of its network, and therefore contravene both Australian Consumer Law and the Competition and Consumer Act.

"Unlimited is a powerful word," Optus counsel Richard Lancaster SC had said in hearings a week prior, adding that Telstra's ads cause "a misleading impression intentionally created to draw consumers into the marketing web" and are "misleading and false".

"Its lack of specificity is in fact a huge part of the problem, because it invites consumers to think about what is important to them about a mobile network ... and telling them those are unlimited."

Counsel for Telstra argued that the ads are not misleading because a reasonable reading of them would not expect the word "unlimited" to be applied to every single feature of every single product on offer from the telco.

Optus said at the time it was seeking monetary relief and permanent injunctive orders to be decided in a case management hearing on June 1. Telstra has already been ordered to pay the legal costs of Optus.

In its recent quarterly update, Telstra said it expects its full-year FY18 earnings before interest, tax, depreciation, and amortisation (EBITDA) to be at the bottom of the AU$10.1 billion to AU$10.6 billion guidance range, and income to be around the middle of the AU$27.6 billion to AU$29.5 billion range.

For its part, Optus reported total net profit of AU$817 million for FY18, with EBITDA of AU$2.8 billion. During the year, Optus brought in operating revenues of AU$8.7 billion. Optus also announced reaching 10.1 million mobile customers.

With AAP

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