Telecom watchdog raps PCCW again over ads

PUBLISHED : Monday, 12 January, 2004, 12:00am
UPDATED : Monday, 12 January, 2004, 12:00am

PCCW has been warned by Hong Kong's telecommunications watchdog for the third time in five months for running down rival companies with misleading advertising campaigns.

The Office of the Telecommunications Authority (Ofta) issued a written warning to the company for claiming its IDD rates for calling the mainland were substantially cheaper than those of its rivals.

PCCW distributed promotional leaflets last year comparing its IDD rates to those of Wharf T&T and other operators to show how customers could save money by switching to PCCW.

However, the ads left out the off-peak rate and a 12 per cent discount offered to some customers of Wharf T&T, which lodged a complaint against the marketing campaign last August.

After a five-month investigation, Ofta found that the PCCW campaign 'had the effect of misleading or deceiving customers'. PCCW made comparisons in its campaign between its 24-hour flat rates for calling the mainland with the peak rates charged by Wharf T&T and other operators.

The company argued its marketing was acceptable because it used asterisks and footnotes, which pointed out that it had cited peak rates of other operators and excluded other promotional offers.

An Ofta report into the complaint said the comparisons made by PCCW in its promotional material were 'not a 'like-for-like' comparison'.

It said: 'Under the guidelines, any statement made about a competitor in comparative advertising must be accurate and should be on a 'like for like' comparison.'

The reprimand for PCCW comes five months after the company was given two written warnings for running down rival operators in ads boasting its home phone lines were 'the best' and '99.9999 per cent reliable'.

Competitors' complaints over the radio and television ads were substantiated in August last year by Ofta after a year-long investigation.

Ofta said at the time that it did not object to boasting about service quality that it described as 'puffery' which customers would not take seriously, but said PCCW's negative statements about rivals breached the Telecom Ordinance.

Separately, PCCW has been issued with another written warning over a complaint that it rejected 135 customer requests for portability - the process by which they switch companies but keep their existing phone numbers - submitted through Wharf T&T last July.

PCCW rejected the requests, saying there was not enough time to process the applications and that it presented manpower problems. It also claimed the application was above an agreed limit on portability of numbers between operators.

Ofta said the authority was 'very concerned that the unilateral action of PCCW-HKT would recur if no clear signal were sent to the industry' and warned the action threatened a breakdown of regulations, harming customer interests.

A similar complaint lodged by PCCW against Wharf T&T for rejecting nine portability requests because of insufficient notice was also upheld by Ofta, which issued a written warning to Wharf T&T, voicing the same concerns.