The Consumer Council said it received three complaints and 27 inquiries while one subscriber complained to the Office of the Telecommunications Authority.

In the wake of SmarTone's February 2 announcement scrapping unlimited data packages, irate customers renewed existing contracts by signing up to buy new handsets.

But on Monday the company backtracked on its decision and inflamed subscribers in doing so.

As the Consumer Council told it, customers felt they were being "misled" by the mobile network operator.

Some accused SmarTone of "obviously cheating subscribers to extend their plans" and being "dishonest."

Without naming the telco, the council said it told the company to contact customers to offer a full explanation and redress.

SmarTone, which boasts 1.54 million mobile customers, earlier announced it was replacing unlimited data plans with a two-gigabyte-a-month cap to comply with OFTA's fair- use policy guidelines.

But it changed its tune as competitors CSL and Hutchison Telecommunications (0215) rolled out five-gigabyte-a-month data packages with a proviso that network access would be slower to users exceeding the pre-set data limit.

SmarTone's U-turn angered especially those who rushed to extend their contracts before the Monday deadline when OFTA guidelines came into play. However, a SmarTone spokeswoman said there are no plans to offer compensation.

But she suggested that people who renewed contracts before Monday may be allowed better terms and that they may not be subject to network access restrictions.

Telecom shares plunged as the news of regulatory whipcracking spread.

SmarTone fell 8.3 percent to HK$14.88 but was still above February 1's close of HK$13.40.

Hutchison lost 10 percent to close at HK$3.21.