Telecom is being criticised over a suggestion by its chief executive that the company has used confusion as a marketing tool.
In a speech to financial analysts in March, Theresa Gattung said telecommunications companies using confusion as a marketing tool was fine and it could be argued that it had helped keep calling prices up for longer than would have been the case.
Gattung told the audience that sooner or later the customer would know that companies had not been straight with them.
"Think about pricing. What has every Telco in the world done in the past? It's used confusion as its chief marketing tool. And that's fine," she said.
"At some level, whether they are conscious of it or not, customers know that that's what the game has been, they know we're not being straight up."
The chief executive of the Consumers Institute, David Russell, says pricing schemes are often too complicated and he is convinced this is a marketing ploy.
Telecom insists it is not trying to fool the public
The company's spokesman John Goulter says what Gattung said was simply a "colourful way" of expressing the company's need to change its culture for new generation telecommunications.
Goulter says Telecom has never tried to hide this and posted the speech on the internet after it was made.
Meanwhile, the Prime Minister has described as "inappropriate" other comments Gattung made at the same event - that the government would not take action against the company.
When talking about the possibility of the government unbundling the local loop, Gattung said that was far from a done deal. She said she doubted the government would take any serious action against Telecom, saying it was "way too smart to do anything dumb here."
Clark says if that was Gattung's belief she gave very bad advice to her shareholders and board.
And Telecom has failed to hold on to all of Monday's gains on
the sharemarket.
Telecom shares closed on Tuesday 12 cents lower at
$4.80.
