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.

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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.

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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.

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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.

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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.

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

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