Vodafone pleads guilty on broadband

Vodafone has pleaded guilty to nine charges under the Fair Trading Act, admitting it may have misled customers about the broadband options that were available at their addresses.

Spokeswoman Kathy Gieck said it was continuing to contest another 18 charges brought by the Commerce Commission, which has also been concerned that customers may have been misled into thinking Vodafone’s ‘‘FibreX’’ cable broadband service was fully-fibreoptic ultrafast broadband.

FibreX is available in Wellington and Christchurch.

‘‘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,’’ Gieck said.

The website address checker excluded ‘‘all other broadband options’’, which could include ultrafast broadband (UFB), if FibreX was available at an address, she said.

‘‘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.’’

The cable networks, which Vodafone acquired as a result of its takeover of TelstraClear in 2012 and renamed ‘‘FibreX’’ four years later, use a technology called HFC (hybrid fibre coaxial cable).

It is generally regarded as superior to copper broadband but not always completely equivalent to fully fibre-optic technologies, at least in terms of its theoretical capabilities.

Vodafone needs to pay a wholesale charge – commonly about $45 a month – if consumers opt for UFB.

But it can avoid that in Wellington and Christchurch if customers opt to instead use its HFC network which it owns outright and which it therefore has an incentive to offer on more favourable terms.

‘‘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,’’ Gieck said.

‘‘We delivered that through a significant investment in our own 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,’’ she said.

The Commerce Commission’s concerns about the marketing of FibreX include its name.

Last year – after the watchdog began an investigation but before it brought charges – Vodafone’s then consumer director Matt Williams said the ‘‘X’’ in FibreX indicated to consumers that the service was not pure fibre.

He also noted that the Advertising Standards Authority had ruled that Vodafone’s FibreX advertising was not misleading.

‘‘We did not intend to mislead customers, and our website address checker has since been updated.’’ Vodafone spokeswoman Kathy Gieck