Complaint: 09/442

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Telecom New Zealand Limited
Upheld / Settled
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Chairman's Ruling

31 July 2009

Complaint 09/442

AWAP 09/022

Complainant: Telecom New Zealand Limited
Advertisement: Vodafone New Zealand Limited

Complaint: The television advertisement for Vodafone showed graphics reading: "FREE BROADBAND UNTIL 2010" and an accompanying voice-over said: "Vodafone are bringing free broadband to the people until 2010".

The press advertisement contained a bold graphic saying: "FREE BROADBAND UNTIL 2010". An insert below headed "Fixed Line Broadband" said "Simply sign up before the end of September to our home phone and broadband Easy Pack + Talk 1 for 24 months, pay only $65 a month until the end of 2009 and get: ..." The components in the offer were listed.

Complainant, A. Pasley of Telecom New Zealand Limited, said "...Vodafone's offer does not provide "free broadband" to all customers, and is therefore misleading...." Telecom noted that the offer was conditional on a customer signing up to a 24 month term to Vodafone's combined home phone calling and broadband package, "Easy Pack", and their national calling plan "Talk 1"....

Telecom said "... that customers in Zone 1 taking Vodafone's "free broadband" offer would in effect be paying an additional $5 per month to get broadband during the remaining months of 2009".

"Further Vodafone do not state that an early termination fee of $299 will apply to customers who terminate during the middle of the 24 month term, which is an essential element of the conditions of their offer."

The relevant provisions were Basic Principle 3 and Rule 2 of the Code of Ethics.

The Chairman ruled to deal with the matter by adjudication with the attendance of parties, a system designed to consider complaints between competitors.

The Advertiser, Vodafone Limited, advised the Complaints Board and Telecom that a pricing anomally had arisen, and all existing Zone 1 customers would be given a $5 credit, and that would "apply automatically to Zone 1 customers taking up the offer for the duration of the offer period."

Vodafone also advised that there were undertaking a longer term review of their home phone and broadband pricing to ensure that it was simple and transparent for customers, but this was a larger project which was still in progress.

The Complainant, Telecom New Zealand Limited, advised the Complaints Board that it was "pleased to accept Vodafone's actions in refunding affected customers $5 per month for the 24 month term of the offer as a settlement of this complaint."

The Chairman noted the advice received that the matter had been settled between the parties in a self-regulatory manner. Accordingly, she said that there was no further requirement for consideration of the complaint by a panel.

The Chairman ruled that the matter was Settled.

Chairman's Ruling: Complaint Settled