Investors call for an audit of Telstra’s mobile phone coverage over claims of exaggeration

Australia’s peak shareholder lobby group wants Telstra’s mobile phone coverage claims to be independently verified, following accusations it ‘tricked Australians into paying top dollar’.

Telstra has refused to say how much coverage it provides Australians using regular mobile phones.

Australia’s peak shareholder lobby group wants Telstra’s mobile coverage claims to be independently verified, following accusations the nation’s biggest telco “tricked Australians into paying top dollar”.

The Australian consumer watchdog is examining allegations made by Vodafone owner TPG that Telstra “distorted” the market by overstating its mobile coverage by about one million square kilometres.

Federal National Party leader David Littleproud has also accused Telstra of “inflated promises”.

Telstra has been fined $75m in the past seven years for misleading or unconscionable conduct and if it’s proven it has tricked customers again it could potentially face hundreds of millions of dollars in penalties.

Australian Shareholders Association chief executive Rachel Waterhouse.

Australian Shareholders Association chief executive Rachel Waterhouse said: “Allegations that Telstra overstated regional coverage raise serious questions.”

“While there has been no finding of misconduct to date, the case highlights the need for a clear, independently verified industry standard,” Ms Waterhouse said.

“A collaborative industry approach would help ensure consumers and investors can rely on consistent, comparable coverage information.”

TPG and Optus base their coverage claims on outdoor mobile phone use – not beefing up the signal with expensive equipment. Telstra has refused to say how much coverage it provides customers using a regular mobile phone.

It quietly changed the wording on its website from stating that it offered three million square kilometres to “one million square kilometres more than other mobile networks”.

Telstra network engineering executive Channa Seneviratne.

Despite the change, Telstra network boss Channa Seneviratne on Tuesday defended Telstra’s coverage statements. He insisted that the three million square kilometre figure was still accurate – but based on using external antennas, which cost thousands of dollars.

“While we’re confident it’s possible to make voice calls without an antenna across this area, the signal availability and quality can be subject to a range of factors and that is why we recommend an antenna is used to maximise the signal,” Mr Seneviratne said.

“Now that Vodafone has communicated how it’s chosen to calculate its coverage footprint for the first time, to help the public understand the difference we’ve highlighted that our three million square kilometres of coverage is based on using an external antenna.”

TPG says Telstra has not disclosed that its coverage is based on external antennas across its marketing and annual report disclosures during the past 15 years.

Telstra chief executive Vicki Brady told investors in February that it provided three million square kilometres of coverage with no such disclaimers.

Telstra chief executive Vicki Brady said in February that the telco had expanded its mobile coverage to three million square kilometres.

Former Australian competition tsar Allan Fels said: “On the face of it, it looks as if Telstra is at risk of breaching the misleading and deceptive conduct provisions of the Australian Competition and Consumer Act”.

Companies can be fined up to $50m per breach.

When asked what Telstra’s exact level of mobile coverage was – without using an antenna – a spokesman declined to answer the question. He instead referred to a statement the telco made on Sunday that its network was “at least one million square kilometres larger than Vodafone”.

TPG’s group executive in charge of consumers, Kieran Cooney, said Telstra was being disingenuous.

“They’re really trying to muddy something that they don’t need to,” he said.

“The issue is very clear. They have made a promise and they’ve charged a premium, and they’ve distorted the market based on selling a service that they have been silent on what you need to get that service.

“To suggest that is a reasonable way that Australians should understand how they get that service is beyond the pale.”

TPG launched a $1.6bn deal to share mobile towers with Optus earlier this year. It had previously wanted a tie-up with Telstra but the ACCC rejected the proposal.

“We don’t think it’s good when industry players have a go at each other. We don’t make a habit of it,” Mr Cooney said.

“But with this one it is a consumer confidence issue on a fundamental question that had been promised to the market. If we knew about it and were not strongly advocating it, we would be falling short of our own duties.”

TPG executive Kieran Cooney says Telstra has distorted the market by overstating its mobile coverage.

Customers must pay for new antennas following certain network upgrades that can render the equipment obsolete. One Telstra customer told this masthead that he was informed he had to upgrade an antenna less than three years after buying it, at their own cost.

Peter Thompson, who lives in Roma – about 480km northwest of Brisbane – and chairs the telecommunications committee of the National Farmers Federation said he had to pay for an expensive upgrade following the 3G shutdown.

“There’s definitely been a $20,000 outlay in infrastructure, and now 5G is coming, we’re going to replace eight of those cel-fis (antenna), some of which are only four years old,” Mr Thompson said.

“A lot of people are spending a lot of money just to get a very basic and, these days, unfortunately not a totally reliable service.”

Mr Thompson said he had reverted to using UHF radios and Elon Musk’s Starlink satellite service to access essential telecommunications.

Mr Littleproud said Telstra’s mobile coverage had deteriorated in his electorate in southwest Queensland.

“Since the shutdown of the 3G network, many areas of the Maranoa electorate have experienced greatly diminished mobile phone service coverage despite inflated promises by Telstra prior to the shutdown,” he said.

A Telstra spokesman said: “We’re happy to work with any customer who may be having issues with any coverage extension device they’ve bought from us.

“We’re also working directly with Peter Thompson to find the right solution for his property.”

Originally published as Investors call for an audit of Telstra’s mobile phone coverage over claims of exaggeration