There's No Such Thing As A Free Handset

Sydney Morning Herald

Friday January 18, 2008

Matt O'Sullivan

THE mobile phone retailer Crazy John's has been accused of misleading conduct by advertising that handsets were "free" under some deals.

The Australian Competition and Consumer Commission yesterday began legal action in the Federal Court against the Melbourne company in an effort to seek corrective advertising.

The competition overseer says that Crazy John's has engaged in misleading or deceptive conduct by claiming that handsets on some of its plans were available "free" or for "$0" when, in fact, customers had to pay higher rates than those on comparable plans without phones. The Crazy John's ads ran on TV and in newspapers in October.

Crazy John's managing director, Brendan Fleiter, said the company had not had enough time to consider the allegations because it was notified only on Wednesday night. But he said it appeared the complaint related to less than 10 per cent of plans on offer at the time.

"I need to take legal advice," he said yesterday.

Crazy John's was Telstra's biggest mobile phone dealer until the end of June, when it signed a deal to sell Vodafone handsets and resell under its own brand mobile phone services using the latter's network. The latest legal tussle comes a month after Telstra was barred from running advertisements boasting that its NextG mobile network is available everywhere in Australia, unless the ads contain fine print detailing black spots.

A Federal Court judge ruled last month that Telstra had engaged in misleading or deceptive conduct in using lines such as "everywhere you need it" in its newspaper and TV advertising.

Telstra also ran foul of the law almost four years ago when a judge ruled that Telstra's use of "$0" mobile phone advertising was misleading and deceptive.

* Farmers have again called on the Federal Government to stop Telstra from switching off its regional CDMA mobile phone network on January 28.

The National Farmers Federation - which campaigned against Labor's broadband policy at the last election - wants the Communications Minister, Stephen Conroy, to seek a "transition period" of up to six weeks for service problems to be resolved before the network is switched off.

Some analysts believe the minister will give his approval on Monday for Telstra to turn off the network, but many industry insiders disagree.

"There are no votes in turning it off," one insider said yesterday.

© 2008 Sydney Morning Herald

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