NTT regional units ordered to stop misleading IP phone ads

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The Fair Trade Commission has ordered the two regional units of Nippon Telegraph and Telephone Corp to stop their misleading advertisements for their fiber-optic Internet Protocol telephone services.

The FTC’s latest business improvement order for NTT East Corp and NTT West Corp followed a similar order issued for the same two regional telephone firms on telephone number directory services in March.

This was the first time in the country’s telecommunications industry that the same companies were reprimanded by the fair trade watchdog twice, industry people said.

According to the FTC’s investigation, NTT East and West distributed in February-November last year some 4,000 flyers and direct mails to promote the “Hikari Denwa” IP phone serives, and the FTC found that a third of them were implying that the services were cheaper than they actually are, a practice that violates the product labeling law.

In one of the most serious cases, NTT East handed out flyers in Niigata Prefecture advertising that its IP phone service was offered at a bargain with monthly basic fees of 997.5 yen, compared to 1,680 yen for fixed-line telephones. But the indicated price of 997.5 yen did not include the costs of using fiber-optic lines that amount to some 2,600 yen to 5,500 yen.

The two phone operators should fully review their ads from consumers’ viewpoint, the FTC said.