Vodafone blasts Commmerce Commission

Telco calls on the new government to reign in its regulator

Vodafone is giving the Commerce Commission a blast over its latest quarterly market report, accusing the regulator of shifting the goalposts and calling on the government to put checks and balances in place "to ensure the quality of the Commission’s work".

“Vodafone has bent over backwards to meet an ever-changing set of criteria that the Commerce Commission introduces as it sees fit over and above the OECD requirements," Vodafone’s GM of corporate affairs, Tom Chignell, says. "It seems a very strange practice for a government agency to be continually restating international benchmarks to support their criticism of an industry’s performance.”

Vodafone says the OECD rankings for mobile services puts Vodafone’s Base plans in the top half of the OECD bit the commission is refusing to include the Base plans in its assessments.

“The Commerce Commission and other observers have been telling us for years that the OECD rankings were the gold standard that we all had to aspire to. As soon as we began to climb up the rankings, the Commission started introducing its own set of requirements that go far beyond anything the OECD requiresm” Chignell says.

The Commerce Commission has required Vodafone reducing the contract term of its Base plans, introduce international roaming, reduce early termination fees and other requirements. Vodafone says it has done done all of these.

However, today’s report finds that the Base plans have a price for out of bundle calls which it deems to be unacceptable, Vodafone says.

“None of these extra criteria are applied to the plans provided in the other 29 OECD counties, so we’re no longer comparing apples with apples. The Commerce Commission is operating without any checks and balances and unfortunately it is dragging the telecommunications industry down with it,” Chignell says.

“The new government needs to take a cold hard look at the work being done here to see whether it is, in fact, delivering any material benefit to New Zealand consumers. This kind of obsession with making sure no company achieves the internationally recognised standard doesn’t help the consumer or the industry as a whole.”

Earlier today the commission noted in its report it had not benchmarked Vodafone’s three Base plans for some time because it had concerns over their accessibility. It has now benchmarked these and a TelstraClear plan separately "because it does not consider these to be mainstream plans".

"In June 2008, Vodafone made changes to its website to allow customers to be able to subscribe to the Base plans over the internet without having to visit a retail outlet. The changes effectively made the Base plans ‘internet only’ plans. When Teligen became aware of this fact it informed the Commission and Vodafone that it intended to exclude the Base plans from future benchmarking as it did not knowingly benchmark internet only plans," the report says.

"In response, Vodafone made the plans available in store again in the September quarter. However, the plans are still not promoted or listed in store displays. Furthermore, the Commission understands that while some commission is paid for their sale, it is less than for other Vodafone plans.

"The plans appear to be constructed so as to optimise Vodafone performance plan performance under the OECD mobile baskets," it says.

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