Telecom has escaped prosecution for its marketing claim that its XT network covered 97% of the places New Zealanders work and live.The telco made the boast from XT's May 2009 launch until February 2010.The Commerce Commission began assessing whether to in
Telecom has escaped prosecution for its marketing claim that its XT network covered 97% of the places New Zealanders work and live.
The telco made the boast from XT’s May 2009 launch until February 2010.
The Commerce Commission began assessing whether to investigate the 97% XT coverage claim on March 31.
Yesterday, responding to an NBR query, a commission spokeswoman said the watchdog’s team had completed its initial assessment and found that “There does not appear to be a breach of the Fair Trading Act.
“The Commission is not proposing to undertake a full investigation at this stage.”
The decision will no doubt gaul Vodafone, which is being prosecuted by the commission for historic network coverage claims made between 2006 and early 2009 (the commission accepts the telco's present day claim of 97% coverage).
If found guilty by the High Court, the telco faces a fine of up to $200,000.
The case was brought in October last year, and had a status hearing last month.
The commission said it would not comment further while the Vodafone case was before the courts - other than to say the prosecution was ongoing.
There are two differences between the Telecom and Vodafone cases.
First, Vodafone’s involves a variety of alleged infractions. A couple are serious, including the way pricing was presented. But one, which centres around the pricing of a single Sony-Ericsson phone for two months in July and August 2007 (see the full list below).
Second, Vodafone withdrew its disputed claims only after prodding from the commission or customers (it says it never intended to mislead), whereas Telecom voluntarily (if quietly) withdrew its 97% coverage claim for XT.
Telecom said it had based its XT coverage claim on modelling of its older CDMA network, but later realised its calculations didn’t match up. The telco is now in the process of rolling out extra XT cellsites.
Still, coverage claims are central to the commission’s case against Vodafone - and it must be scratching its head over how its rival has escaped serious scrutiny.
The commission says its five charges against Vodafone relate to:
1) the extent of the coverage of Vodafone’s wireless broadband network, made in Vodafone’s ‘broadband everywhere’ marketing campaign between October 2006 and April 2008;
2) the availability of a $10 free airtime credit for those customers who registered their details on Vodafone’s website between May 2007 and September 2008;
3) the cost of using the Vodafone Live mobile internet service between February 2007 and August 2008;
4) the cost of using Vodafone’s $1 per day casual data charge for Vodafone’s mobile internet service between July 2008 and November 2008;
5) the size of Vodafone’s mobile phone or 3G mobile phone network between September 2008 and February 2009; and
6) the price of a Sony Ericsson W200 mobile phone between July and August 2007.
