Vodafone NZ guilty of misleading customers

Telco’s FibreX claims breached Fair Trading Act.

Vodafone NZ guilty of misleading customers

Vodafone NZ has lost its battle with the Commerce Commission over the naming of its FibreX broadband service, with a judge finding the telco guilty of misleading conduct.

The commission argued that people were likely to think they were being connected to the ultrafast broadband (UFB) network if they signed up for Vodafone’s FibreX product.

FibreX was offered in Wellington, Kapiti and Christchurch between 2016 and 2018. Marketing of the product included phrases such as “FibreX is here” or “FibreX has arrived”.

Judge Sinclair found Vodafone’s branding and advertising was liable to mislead consumers into thinking FibreX was delivered over a fibre-to-the-home network, the same as UFB, when it wasn't.

FibreX used fibre optic cable to the street cabinet, then copper cable from there to the home.

Vodafone was found guilty of nine charges under the Fair Trading Act.

We first warned people about FibreX in 2017 after getting complaints from consumers about the service. One Consumer NZ member told us they’d been close to signing up to a plan when the salesperson mentioned they wouldn’t be linking to fibre but to Vodafone’s cable network.

In court, Vodafone’s lawyer said the telco didn’t want to use the word "cable" because customers associated it with “slow outdated and aging technology”. She told the court the addition of "X" in the brand name was designed to differentiate it from fibre.

The commission brought in Professor Phillip Gendall, a marketing expert from Otago University, who said people would assume a business wouldn’t be allowed to call a product something it wasn’t.

“I think they would look at FibreX and think ‘well fibre, that suggests fibre’, so they wouldn’t be allowed to call it fibre if it wasn’t,” Prof Gendall said.

Commission chair Anna Rawlings said the case reinforced the importance of clear marketing, including of the product name.

Businesses “must not operate under the assumption that consumers will make further inquiries to find out exactly what is being offered to them,” Ms Rawlings said.

Vodafone is due to be sentenced later this year.

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Jim T.
04 May 2021
NO CHOICE

At our former residence we signed up for Spark Fibre virtually as soon as it was available in our suburb (Parklands) Not because we stream, haven't got onto that yet !! But because we are early adopters and like new, "faster" things. Like our $175k EV. Anyway we moved to Pegasus and found to our disdain that we had. NO CHOICE - it was Vodaphone or Vodaphone. Apparently they have some exclusive contract that says EVERY household in Pegasus has to sign up with Vodaphone for any of their telephony. Contemplating contacting the CC about this restrictive trading practice, which I thought we had got rid of in this Country a few years back. No problem with the speed of FibreX, but we do have frequent drop-outs - some wag reckons these are caused by the Downer man everytime he sets up a new connection - not sure on that one

Barbara M.
02 May 2021
FibreX is fast

I used cable broadband when living in Lower Hutt, before it was called FibreX. I found it fast, internet pages loaded almost instantly. Now we are outside the cable area we have Fibre installed and it is disappointing compared to the cable speeds. I believe we could pay for faster broadband but I am not sure the additional cost is worth the price. People need to know the cable is fast. Vodafone may have mislead but the product lives up to any misleading claims. It is not an inferior product.

Kristine M.
01 May 2021
Not just the name

Vodafone misled with the name of their product but also when I requested to connect to fibre (as you are directed to go through your provider) they were ‘confused’ internally and tried to ‘push’ me to their fibreX product - it took several lengthy phone calls and a unprompted street visit from Chorus before we eventually got fibre. It shouldn’t have been that hard!

Gary K.
01 May 2021
Storm in a tea cup?

I appreciate that some might find the FibreX advertising misleading. I didn’t. I knew that Vodafone used copper to deliver from an optical fibre cable—as they have done for the years since they bought out the TV delivery service. I also knew that copper with light load demands on its signal carrying capability could shift information at very high rates. That is, with no one except our home using it, we would be able to download internet information at respectable transmission rates. I use Vodafone to deliver “broadband” internet connectivity together with VOIP home phone and Vodafone TV. I use the FibreX200 plan which promises a download rate of 200Mbps. A couple of days ago I tested my connection rate while also running Vodafone TV (which uses the internet to stream TV services). I chose to test the Vodafone services in Wellington, which should give the highest possible rate, and selected what looked like reasonable capacity servers in Sydney, Czech Republic, Belgium, Antigua, and New York. The lowest download rate was 195Mbps (Belgium) and the fastest was 504Mbps (Norsewood, New Zealand). The fast upload rate 128Mbps (Norsewood) and slowest was 17Mbps (Antigua). The rates for Vodafone, Wellington, were 381Mbps download and 102Mbps download.

I can only comment that even if FibreX is “misleading” it lives up to the claims Vodafone makes.

Steve L.
01 May 2021
Fairs fair

How about rather than give them a fine that is paid to the commission (whom this misleading service has not affected one ounce) but give all those impacted their money back or at least a portion of it.

Maybe we should all start paying our Vodafone bills with an alternative NEW currency called moneyX instead of real money?

Maggie D.
01 May 2021
Always thought it was weird

There were repeated outages with this connection. I always thought it was weird sending data over fibre only to travel the last distance to the modem via copper. Why? Always satisfying to see these telcos held to account.