Telstra gets legal with Optus over 3G iPhone

Telstra has served Optus with a notice from its legal department this morning questioning the rival telco's ability to provide adequate service for the 3G iPhone, in a calculated move to disrupt the rival telco's 3G iPhone launch.
Written by Marcus Browne, Contributor

Telstra has served Optus with a notice from its legal department this morning questioning its rival's ability to provide adequate service for the newly released 3G iPhone.

The incumbent warned Optus yesterday that "some 3G devices will be incompatible" with its 900-megahertz (MHz) 3G network, only days after Optus revealed that it will launch Apple's 3G iPhone next month.


A Telstra spokesperson said today that consumers should be aware that "some of these new phones" will not work on a 900MHz frequency.

Optus announced last month its plans to expand 3G network coverage to 98 per cent of Australia's population using the 900MHz frequency, a move which Telstra believes will interfere with or render some devices inoperable due to the fact that "the most common" 3G frequencies in Australia are 850MHz and 2,100MHz.

"Telstra is concerned that Optus may represent to customers that they can enjoy a range of 3G and they will be able to access those services in more places as Optus expands its services," Jenifer Crichton, general counsel for Telstra's consumer legal department, said in a letter addressed to her Optus counterpart, seen by ZDNet.com.au.

"However, in fact those services and features will not be available if the 3G device is incompatible with Optus's 3G 900MHz network," she added.

Telstra has claimed Optus may be in breach of the Commonwealth Trade Practices Act as a result of statements regarding features and services in its press release announcing the planned network expansion, saying that they could amount to "false or misleading" conduct on Optus's behalf.

"If Telstra is basing its claims on this release alone then I don't believe they've checked all the facts," said Mark Novosel, telecommunications market analyst for research group IDC. "Optus has previously said it will be expanding its network using a combination of 900 and 2,100MHz spectrums."

"Optus hasn't said that the 3G iPhone will be available across its whole network," he said. "From previous releases I've read Optus has said that it will be using a 2,100MHz frequency for major regional towns and centres, which is fully compatible with the 3G iPhone."

An Optus spokesperson told ZDNet.com.au today that the telco "will continue to be clear with customers about the compatibility of devices on its networks", but denied Telstra's letter has anything to do with the iPhone.

IDC's Novosel said he had no reason to believe that the average consumer would be deceived by reading Optus's statement, adding that he'd "definitely read a lot more releases that had been more deceiving than this one".

"Telstra ran into some trouble when it launched the Next G network under the tag 'everywhere you need it', when coverage wasn't quite available everywhere ... Optus doesn't make any bold claims like that here, so I think Telstra may just be a little upset about what happened to them," he said.

The analyst believes that this could also be a move on Telstra's part to unsettle Optus ahead of a possible iPhone announcement of its own.

"Telstra will continue to monitor Optus's claims in relation to use of 3G devices on its 3G 900MHz network, and will not hesitate to take such action as is appropriate," said Telstra's Crichton.

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