4G fight heads to Commerce Commission

LATEST: Telcos full of hot air, customers don’t care

The latest chapter in the tiff between the two telcos [NZX:SPK] over which has the larger 4G network has led to Vodafone complaining to the Commerce Commission about Spark's advertising.

Vodafone says it has sent “numerous” letters to its competitor, asking it to withdraw its advertising that claims it has the larger network “or to provide some facts supporting their claim to avoid misleading consumers.”

Vodafone external communications head Craig Jones says Vodafone has been open about its methodology and claims Spark is being unco-operative and dishonest because it will not do the same.

“We are very confident that our 4G network – which today covers over 74% of New Zealand’s population – is still the largest. Our superior 4G network has been a differentiator for Vodafone for two years, since we first brought 4G to New Zealanders,” he says.

But Spark corporate relations manager Andrew Pirie has bitten back, saying “the sun is no longer shining” for Vodafone’s campaign because Spark has caught up.

“Vodafone had the head start by launching 4G in 2013 and we were playing catch up… But we aggressively closed the gap and we’re confident we have overtaken Vodafone in 4G coverage but it’s all getting a bit childish,” Mr Pirie tells NBR ONLINE.

“Vodafone needs to see the light. Campaigns like this have a shelf life.”

He says it would be best if both telcos withdrew their campaigns for the sake of the consumer.

Spark threatened to take Vodafone to the Commerce Commission in December, saying the campaign was no longer true. Vodafone called Spark's bluff so Mr Pirie says Spark decided to start its own “largest 4G network” campaign in February.

“The issue was that our business customers kept seeing Vodafone’s campaign and asked us why we were behind. We let them know we had a larger network but that didn’t have as much credibility as an advertising campaign.”

Mr Pirie says Spark will continue its advertising campaign if Vodafone does not withdraw its own.

In an ironic twist, the Spark boss adds that Vodafone’s complaint to the Commerce Commission is going too far and the regulatory body has more pressing issues to attend to.

“Customers are also unimpressed with these spats.”

The Commerce Commission has yet to make a statement on whether it will look into the case.

Vodafone not backing down
But Vodafone says it’s not neck and neck and it has proven its 4G network is larger than Spark’s so it will not take down the billboards.

“Our view remains that Spark's 4G ads are in breach of the Fair Trading Act, and have been since they were first launched. Spark should remove its advertising and stop misleading the public.”

The second biggest telco will erect new billboards today:

Vodafone's claims:

• A large portion of Spark's 4G is L700 which most consumers cannot access because there are a small number of devices available
• We have around 20% more network sites available to current 4G users in New Zealand today (599 L1800 sites vs. Spark’s 498 sites)
• Vodafone has more live 4G sites overall than Spark (626 live 4G sites compared with Spark’s 606 licensed applications on the Radio Spectrum Management database, some of which might not be live)
• In addition to New Zealand’s largest 4G network coverage, only Vodafone provides 4G roaming (this is not available at all from Spark and 2 degrees) and our customers can use our 4G service in 47 countries around the world.  This gives our customers access to the world’s largest 4G network.

cgibson@nbr.co.nz