Telstra probably knew its Next G advertising campaign was misleading and expected to write it off as the "costs of doing business", according to an IBRS analyst.
Yesterday, the Federal Court ruled that Telstra's Next G advertisements, which claim the network would provide coverage "everywhere you need it", misled consumers.
This will not affect Telstra in the slightest and was likely part of its marketing strategy, IBRS analyst Guy Cranswick told ZDNet Australia today.
Companies often make marketing claims which they know will be picked up by the regulator and see how long it takes until they are stopped, according to Cranswick.
"This sort of marketing and legal strategy is quite common, and that's not just Telstra," said Cranswick. "That's many, many companies".
Telstra's marketing campaigns are no different to others, labeling its strategy a "bandwagon campaign".
The complex nature of technology products and consumers' difficulty comprehending key benefits means that advertisers can rely on brand names to win consumers over, even if it requires distorting the truth.
"Technology is very, very complicated and people will make decisions around big names," said Cranswick.
The negative publicity of the case will not have a large affect because the market is closed and there are not a lot of other options, said Cranswick.
"Telstra can weather that sort of problem," he said.
Telstra's misinformation in this instance will strengthen the argument for Telstra to be broken into parts, said Cranswick. "I think that Telstra's actions give adequate argument ... for the new government to look at how the structure of communications is run in this country."
Labor promised before the election that it would introduce a tougher operational separation regime for Telstra.
Dont know what more Telstra can do - all marketing needs a sign off by BOTH internal AND external lawyers.