4G war spills over into the Commerce Commission as Vodafone and Spark continue bickering

  • Telecommunications
  • March 5, 2015
  • Damien Venuto
4G war spills over into the Commerce Commission as Vodafone and Spark continue bickering

One need only look at the consistent tit-for-tat banter exchanged by the likes of Apple and Samsung to appreciate how intense—and sometimes juvenile—the rivalry can become between two competitors. And while this makes for great entertainment for the consumers observing from afar, it is the exception to the general rule. Most often, brands simply focus on pandering their own products to the consumer (after all, they don't want much—or any—of their ad time or space dedicated to a competitor).

However, recently, Vodafone and Spark have become embroiled in an ongoing battle about which telco has New Zealand's largest 4G network. 

In December last year, Spark's general manager of corporate relations Andrew Andrew Pirie said the company would consider complaining to the Advertising Standards Authority in the new year after writing to Vodafone and requesting it take its billboards down, but Vodafone declined and said its claim for the largest 4G network presented on its billboard was valid. 

In the end, Spark decided not to file a complaint, and instead matched Vodafone’s billboard with its own, also claiming to have the largest 4G coverage.  

Now, following this move by Spark, Vodafone has updated its advertising to say: 'You can rely on NZ's leading mobile network (and still the largest 4G too!).'

In a statement sent to StopPress yesterday, Vodafone external communications manager Brad Pogson said that these new billboards have been erected in response to Spark's refusal to remove its billboards.

"We’ve sent numerous letters to Spark since their billboards went up asking them to withdraw their ads, or to provide some facts supporting their claim to avoid misleading consumers further than they already appear to have done," the statement said. "Spark has been unwilling to do either.  And that’s despite asking us to share information about our network and modelling methodology which we have done openly in an attempt to get this resolved. Our modelling is based on a Global standard tool."

At times, the tone of the statement seemed to emulate the speculative musings of a fictitional detective, deducing findings from ambiguous remarks:    

"Even Simon Moutter seems uncertain about their claim, commenting at their results announcement, 'We now believe Spark New Zealand is overtaking its competitors in 4G mobile coverage'.  'Overtaking', not 'largest.' Curious choice of words don’t you think?"

Curious indeed. But something that's not quite so curious or surprising is that Spark has responded with an equally scathing tone in a statement by Pirie:  

"Vodafone launched its 4G network in NZ in early 2013 and Spark (then Telecom) launched 9 months later. The resulting 'head start' meant that Vodafone could claim to have the largest 4G network for some period time and they made this a central plank in their marketing. However, since we launched we’ve been aggressively expanding our network and by late last year we were catching up, if not overtaking, Vodafone. At that time, we formally requested Vodafone stop using its 'largest 4G network' marketing, on the basis that it could no longer substantiate a clear and unassailable lead. Vodafone refused to do this (perhaps understandably given how reliant they’ve been on the 'largest network' claim in their marketing, while we’ve been busy doing things for our mobile customers like our Spotify partnership, Socialiser, free WiFi, Spark Thanks etc). We contemplated lodging a complaint with the Commerce Commission before Christmas on this, but frankly we had better things to focus on."

Vodafone does however deem the issue important enough and has referred the matter to the Commerce Commission.  

"We’ve been very transparent with Spark about our population coverage, yet, they have not disclosed any information to us. We suspect that this is because they are scrambling in a bid to catch up," say Pogson. "If they can prove their 4G network is larger, we’ll take down our billboards. But right now, they appear to be making claims based on future coverage which is simply not fair to consumers."

Spark's riposte includes an observation that the difference between the two networks is now too small for either telco to claim superiority, with Pirie saying:    

"Vodafone has since responded indicating that, like us, they continue to expand their 4G network – and are claiming that by doing so they are keeping themselves marginally ahead. We don’t see it that way – nor do we believe most customers really care whose network may be slightly larger (we’re talking a point or two in terms of the percentage of the population covered) at any point in time. We’ve therefore indicated to Vodafone that we would be prepared to take down our billboards if they stop their 'largest network' campaign. Unfortunately so far they’ve declined to do so."

Perhaps, this statement carries the most weight in this 4G war, because it's really unlikely that many consumers are as concerned about the size of respective 4G networks as the telcos embroiled in the battle. That being said, misleading advertising is prohibited under Fair Trading Act, and should one of telcos be found to have contravened these rules, then the 4G war will be brought to an abrupt end as one party will be forced to remove its advertising. 

Full statement from Vodafone:

As you know, both Vodafone and Spark are advertising ‘New Zealand’s largest 4G network.’ We thought you’d be interested in the full story, outlined below.

We’ve sent numerous letters to Spark since their billboards went up asking them to withdraw their ads, or to provide some facts supporting their claim to avoid misleading consumers further than they already appear to have done.

Spark has been unwilling to do either.  And that’s despite asking us to share information about our network and modelling methodology which we have done openly in an attempt to get this resolved. Our modelling is based on a Global standard tool.

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.

Even Simon Moutter seems uncertain about their claim, commenting at their results announcement, “We now believe Spark New Zealand is overtaking its competitors in 4G mobile coverage.”  “Overtaking”, not “largest.” Curious choice of words don’t you think?   

We are worried that Spark is repeatedly misleading New Zealanders with their advertising and we believe Spark has been in breach of the Fair Trading Act since their advertising began at the beginning of February.
 
Spark have so far been unwilling – or perhaps unable – to prove the scale of their 4G network. Clearly they are out to challenge our competitive leadership, and it seems that they are prepared to allow customers to be confused as a way of achieving this.
 
We think enough is enough.  We have referred the matter to the Commerce Commission.
 
We’re so confident in our 4G network, we’ve decided to build on this by making our advertising even stronger. We first spent about a year talking about NZ’s first and only 4G network, then almost another year talking about having NZ’s largest 4G network. Customers tell us that our overall network leadership resonates with them, so from tomorrow we will be saying: “You can rely on NZ’s leading mobile network (and still the largest 4G too!).”  See the attached copy of our new billboards.   
 
Here are some of the facts about our leading network:
 

  • Our 4G network is still the largest, reaching over 74% of the population – and growing every day
  • 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

We’ve been very transparent with Spark about our population coverage, yet, they have not disclosed any information to us. We suspect that this is because they are scrambling in a bid to catch up.
 
If they can prove their 4G network is larger, we’ll take down our billboards. But right now, they appear to be making claims based on future coverage which is simply not fair to consumers.

Full statement from Spark:

Vodafone launched its 4G network in NZ in early 2013 and Spark (then Telecom) launched 9 months later.  The resulting “head start” meant that Vodafone could claim to have the largest 4G network for some period time and they made this a central plank in their marketing.  However, since we launched we’ve been aggressively expanding our network and by late last year we were catching up, if not overtaking, Vodafone. At that time we formally requested Vodafone stop using its “largest 4G network” marketing, on the basis that it could no longer substantiate a clear and unassailable lead. Vodafone refused to do this (perhaps understandably given how reliant they’ve been on the “largest network” claim in their marketing, while we’ve been busy doing things for our mobile customers like our Spotify partnership, Socialiser, free WiFi, Spark Thanks etc).  We contemplated lodging a complaint with the Commerce Commission before Christmas on this, but frankly we had better things to focus on.
 
We continued to build our network over the summer and in early February, confident we were now in the lead in terms of network build, we installed two of our own billboards claiming we had the largest 4G network. We did this because we wanted to send a signal to our customers, especially in the business market – where national network coverage is very important, that they shouldn’t give credence anymore to Vodafone’s claim. 
 
Vodafone has since responded indicating that, like us, they continue to expand their 4G network – and are claiming that by doing so they are keeping themselves marginally ahead. We don’t see it that way – nor do we believe most customers really care whose network may be slightly larger (we’re talking a point or two in terms of the percentage of the population covered) at any point in time.  We’ve therefore indicated to Vodafone that we would be prepared to take down our billboards if they stop their “largest network” campaign.  Unfortunately so far they’ve declined to do so.
 
We were aware more than a fortnight ago that Vodafone had approached the Commerce Commission, which we understand has yet to determine whether it will consider the matter.  We’re not sure why Vodafone chose to go public about it this week.

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