Vodafone and the Commerce Commission are due to square off in the Auckland District Court over the telco's controversial "FibreX" service (a hearing scheduled for today was adjourned until April 3).

MORE: Commerce Commission opens investigation into Vodafone's 'unlimited' mobile plan.

On November 16, Vodafone pleaded guilty to nine charges brought by the Commerce Commission over FibreX, all related to it creating on the impression on its website that the service was the only alternative for customers in certain areas when it was not.

But it decided to stick with the "FibreX" name and contest another 18 charges that centre on the ComCom's allegation that it misleads customers.


On June 15, the Commerce Commission brought 29 charges under the Fair Trading Act, centring on its allegation that "FibreX" is a misleading name.

The commission alleges its name implies FibreX is a full fibre-optic broadband service, like those services delivered over the government-subsidised Ultra-Fast Broadband or network, "when it is not."

The "FibreX" network uses a mix of fibre and copper cabling, and is available in parts of Wellington, Christchurch and Kapiti.

It began life in the 1990s as Saturn Cable. It was bought by TelstraClear, then became part of Vodafone after its purchase of TelstraClear.

Vodafone says it has spent millions on upgrading the electronics on the FibreX network to give it speed comparable to a full-fibre network.

It is better for Vodafone in business terms if a Wellington or Christchurch customer chooses a FibreX plan, because it owns the whole network. For a UFB connection, Vodafone has to give roughly half the money from a monthly plan to UFB network operator Chorus (in the capital) or Enable (in Christchurch).

Vodafone faces fines of up to $600,000 per offence.

That means the telco could face up to $16.2m in penalties over the 27 charges bought by the commission, although it is likely to receive a discount for its partial guilty plea.


It has yet to be sentenced for the charges it plead guilty to on November 16.

A decision on the remaining charges is expected to be reserved at the end of today's hearing.

Watchdog targets telcos

The ComCom says telecommunications is the most complained-about industry and has made retail telecommunications - and elements such as marketing, contracts and quality of service.

On November 6, Spark plead guilty to two charges related to over-billing customers.

It now faces up to $1.2m in penalites. ComCom and Spark lawyers gathered in the Auckland District caught on February 13 for a sentencing hearing, only to be told the judge had not had time to read all of the written submissions.

Sentencing was delayed until April.

Vodafone makes website changes

"In the course of promoting FibreX on our website, we regret we created the impression with some consumers that alternative broadband options were not available at their address, when they may have been," Vodafone said in a statement on its November 16 partial climb-down.

"We should have clarified that FibreX was the recommended option, not the only option. We did not intend to mislead customers, and our website address checker has since been updated.

"Vodafone launched FibreX with the intention of providing consumers with a compelling broadband alternative to pure fibre 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. We are proud of the product and the network it runs on. FibreX has enhanced broadband competition in New Zealand and offered consumers a fibre-comparable user experience."

The ComCom declined comment while the case was before the court.

New Vodafone NZ chief executive Jason Paris started on November 1.

Paris told the Herald soon after his appointment that his company has to do a better job at marketing.

Long-time Vodafone NZ marketing boss Matt Williams announced his resignation around the time of Paris' appointment. He has been replaced by former NZME and MYOB executive Carolyn Luey