Simon Hendery: Knuckle-raps show telcos still out to profit from confusion

By Simon Hendery

Confusion still appears to be a key marketing tool used by telecommunications companies to flog their services.

Last week the Advertising Standards Authority (ASA) - the ad police at the centre of our self-regulating complaints system - handed down dual reprimands to our two biggest telcos.

Both companies had complaints against them upheld on the grounds that they breached the "truthful presentation" rules within the advertising code of ethics.

Telecom's sin related to the promotion of its $10-a-month Freedom Plan service for calling between a home line and a nominated mobile. The scheme had been pitched as "you can call as much as you like" when in fact the small print revealed each call was limited to 60 minutes.

Vodafone's wool-pulling involved its BestMate promotion, a very slick and eye-catching ad campaign where phones turn into Ken and Barbie doll-sized people and customers are told they can "call, video and text your BestMate all you like for $6 per month". What wasn't made clear was that BestMate was only available to pre-paid subscribers, not those signed up on a monthly contract with Vodafone.

These two rulings may be more at the misdemeanour end of the marketing crime scale but they highlight an ongoing credibility problem from which the telcos seem incapable of extricating themselves.

Telecom chief Theresa Gattung famously put her foot in it last year when she admitted "every telco in the world" had "used confusion as its chief marketing tool. And that's fine."

Speaking to analysts last March she said: "You could argue that that's how all of us keep calling prices up and get those revenues, high-margin businesses, keep them going for a lot longer than would have been the case.

"But at some level, whether they consciously articulate or not, customers know that's what the game has been.

"They know we're not being straight up."

When the remarks were reported, Telecom said the comments were made in the context of how Telecom was changing its business model to give more power to customers.

But the latest ASA decisions suggest the confusion legacy still lingers.

Admittedly telco services are inherently complex so devising a 30 second TV ad that covers all the bases while still being interesting to watch is not easy. But the industry in general, and Telecom in particular, have such a low standing with consumers that they need to ensure they do nothing deceptive to give their customers any further reasons to loathe them.

Spam plan: This column recently discussed whether there was money to be made for an internet service provider able to bring corporate "receiver rule" spam blocking technology to the consumer market.

Larger companies can keep their inboxes relatively spam-free using technology that recognises and refuses to connect to known senders of large amounts of invalidly-addressed spam.

Identifying an email sender through their unique IP address (internet protocol address) is a key tool in the spam fighting arsenal.

It now seems such a service may be on the way for those consumers willing to pay for it.

Paul Henry, a US-based "technology evangelist" for global security technology specialist Secure Computing, was here in February spreading the message that "2007 will be the year of IP reputation".

By that he means computer users will become increasingly wary of confirming the identity of the person (or machine) trying to communicate with them.

"The interesting part about it is that using reputation-based defences today you can eliminate 80 per cent of your spam without ever opening an email," Henry told the Business Herald.

There was growing global interest in offering managed anti-spam email accounts to consumers and Secure Computing was involved with a Sydney company about to launch such a service, Henry said.

"I haven't seen it in New Zealand but there are some discussions under way [involving Secure Computing] it's just a matter of time."

A big turn-off: Could the world survive a day without computers? The organisers of Shutdown Day (March 24) want to find out.

The geeks seem to think turning off won't be an issue. About eight out of every nine voters on the campaign's website - - claim they'll have no problem powering off their machines for 24 hours.

However, whether too many remember to participate on the day remains to be seen, and the fact organisers have chosen a Saturday seems to be a cop-out in terms of testing the corporate world's ability to cope without technology.

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