The consumer regulator told media on Wednesday that the penalties thrown against Singapore Telecommunications Ltd's (SingTel) Australian subsidiary Optus for airing misleading advertising are insufficient.

The Australian Competition and Consumer Commission (ACCC) began its legal proceedings in the Federal Court in Melbourne against the telco for violating the Trade Practices Act by using the word “unlimited.”

Allan Ashar, chief executive of Australian Communications Consumer Action Network, said using the word “unlimited” in the telco's advertising for their products and services – prepaid mobile phone and home phone – is misleading.

"[The ACCC] should be seeking an order to provide compensation for any consumer who suffered loss or damage as a result of the misleading conduct," he told Fairfax media.

Earlier, the ACCC said that advertisements in television, radio, and prints claiming “unlimited” calls on Optus products - $70 prepaid Turbo Max plan and “unlimited” broadband and calls on its broadband and home telephone plans - are deceptive to its customers since both services may be scrutinized due to its limitations and restrictions.

The commission is seeking declarations that Optus violated the Act, injunctions against the ads and costs.

Optus is an Australian firm that offers telecommunications and information technology services.