ComCom files charges against Vodafone for misleading consumers over FibreX; Vodafone to defend case

Friday 13th April 2018

Vodafone New Zealand will defend 27 charges laid by Commerce Commission for false and misleading conduct, alleging the telecommunications company misled consumers into thinking its FibreX product was a full fibre-optic broadband service like those delivered over the government-subsidised ultra-fast broadband network.

The charges were filed in the Auckland District Court and relate to conduct in the Wellington, Christchurch and Kapiti regions where FibreX is offered, between Oct. 26, 2016, and March 28, 2018, the regulator said in a statement. The matter will be called in the Auckland District Court for the first time on May 22.

"The commission alleges that by naming its broadband service 'FibreX', along with its advertising of FibreX on billboards, radio, in-store, online and in direct-marketing, Vodafone misled consumers into thinking that FibreX was a full fibre-optic broadband service (like those services delivered over the government-subsidised ultrafast broadband network), when it is not," the Commerce Commission said. "The commission also alleges that Vodafone’s website misled consumers about the options of broadband services (including full fibre-optic broadband) available at their addresses."

FibreX is a broadband service delivered over Vodafone’s hybrid fibre-coaxial (HFC) network which uses fibre to the street cabinet, and then coaxial cable to the home. By comparison, full fibre-optic broadband services are delivered over the government-subsidised ultra-fast broadband network which only uses fibre-optic cabling to deliver broadband to consumers’ homes.

Vodafone said it is disappointed by the approach taken by the Commerce Commission.

"We disagree with the charges laid by the commission and welcome the opportunity to defend the naming and marketing of FibreX and reinforce the benefits of this service," the company said in a statement.

"We had a vision to provide consumers with an alternative way to receive super-fast reliable broadband that would also be more affordable and offer a better installation experience. We delivered that through a significant investment in our own hybrid fibre coaxial (HFC) network," the company said. "We think this type of investment in infrastructure is good for New Zealand. It promotes competition and gives consumers choice, and we are surprised the commission does not appear to welcome that."

Vodafone said it has "been clear in our communications to consumers throughout", noting that in 2017 the Advertising Standards Authority looked into its advertising of FibreX and ruled it was not misleading.

"They noted that consumers are more interested in the speed than the technology behind their internet service, and that FibreX performs to a comparable standard to other fibre access technologies," Vodafone said.

Last year, the Commerce Commission warned MyRepublic, Two Degrees Mobile, Spark New Zealand and Vodafone about conduct it considered breached the Fair Trading Act, saying the telecommunications sector generated a high number of customer complaints despite efforts to improve compliance by the commission. Vodafone's warning related to a 12-month promotion.

(BusinessDesk)

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