Telecom drops court action after Vodafone makes ad changes - but takes complaint to ComCom

Telecom says it has withdrawn court action over Vodafone's "Supernet" ad campaign after Vodafone, in an about-face, agreed to changes (see below).

However, the stoush isn't over yet. 

“In proceedings due to be heard next week, we were seeking an interim injunction requiring Vodafone to change certain aspects of the campaign on the basis they breached the Fair Trading Act 1986, as in our view they were misleading and likely to deceive consumers. Given the changes now made, we have achieved this immediate objective,” Telecom Retail CEO Chris Quin says.

“However, Vodafone’s actions in this campaign raise serious concerns under the Fair Trading Act. We have lodged a complaint with the Commerce Commission and will continue to pursue that complaint with urgency.

Spokesman Andrew Pirie denied Telecom was taking the matter to the Commerce Commission, despite Vodafone's changes and the case being dropped, to milk the affair for more publicity. "It's about making sure all market participants play by the rules," he told NBR ONLINE.

Telecom says the changes made by Vodafone are:

• In its online/YouTube advertisement explaining the overall SuperNet concept, Vodafone has removed the word "fastest", and has also included appropriately prominent disclaimers which note that "4G is live in parts of New Zealand. A qualifying plan and capable device are required" and "Vodafone Ultra Fast Broadband is available on our cable network in parts of Wellington, Christchurch and Kapiti and coming to more places around NZ".
• Telecom is aware that Vodafone has taken steps to ensure that all executions as a part of its SuperNet campaign that rely on its cable network have been removed from areas outside its current cable network coverage.
• The television advertisements with which Telecom had most concern have ceased, and in relation to, for example, the "Unleash your Mobile" advertisement for the 4G service, suitably prominent qualifiers of "4G is live in parts of New Zealand" and "a qualifying plan and capable device are required" have been added.
• Vodafone has confirmed that it no longer intends to use a ‘long form’ advertisement that was distributed in a range of New Zealand newspapers, and in respect of which Telecom had raised issues.
• Vodafone has confirmed that billboards concerning HD video and gaming on 4G are no longer being used.

NBR notes Vodafone still makes mention of HD movie streaming on the section of its website promoting 4G - an activity NBR considers unrealistic on today's mobile data plans from Telecom, Vodafone and 2degrees, as even the most generous monthly cap would be demolished in two hours if a full HD movie was streamed to or via a mobile.

For its part, Vodafone confirms it has added some "explanation" but the headlines that its Supernet advertising campaign "will continue unchanged following Telecom’s announcement today it has dropped its court case seeking an injunction."

Vodafone Consumer Director Matt Williams says Telecom’s back-down on its court action endorses Vodafone’s fact-based SuperNet campaign.

“This campaign was about Vodafone’s fixed and mobile networks being the best, fastest and most reliable.  We have the overwhelming evidence to back this up and we stand behind both our network and our campaign."

Vodafone to defend Supernet ads in court   

Aug 2: Vodafone says it will defend its Supernet advertising after legal proceedings were lodged against it today.

Telecom spokeswoman Lucy Fullarton says the telco wants a court order to stop or change aspects of the Vodafone’s “Supernet” campaign.

She says Telecom believes it breaches the Fair Trading Act because it is misleading and likely to deceive customers.

While proceedings in the High Court were lodged this morning, a timetable is yet to be finalised.

Vodafone spokeswoman Emma Carter says the company is confident in what it is communicating and will defend it in court. 

NBR ONLINE understands Telecom’s objections are to do with specific claims Vodafone has made in its ads as the FTA requires claims such as best, fastest and superior to be fully substantiated.

Telecom is also thought to be upset at Vodafone’s use of “ultra fast” to describe its broadband in Christchurch, Wellington and Kapiti.

Commerce Commission spokesman Gordon Irving says it has been made aware of the complaint.

“We could get involved but at the moment we’re just sitting and watching.”

Mr Irving says he was not aware of any other complaints about Vodafone’s advertising asides from Telecom’s. 

The commission fined Vodafone almost $1 million in 2011 after the telco pleaded guilty to 21 Fair Trading Act charges.

Former Vodafone marketing director Greg Campbell said at the time the company takes the FTA charges and resulting fine very seriously.