KEY POINTS:
The Commerce Commission plans to investigate a complaint laid by Telecom about claims made in a Vodafone advertisement.
Commission spokesperson Allanah Kalafatelis said that it will investigate the telco's complaint to ascertain if a breach of the Fair Trading Act had occurred.
"I can confirm that we have opened an investigation over a potential breach," she said. It is unclear how long the investigation will take.
The advertising in question claims Vodafone has "New Zealand's largest and fastest mobile network".
Telecom refutes the claim, saying its EVDO 3G network is more extensive than Vodafone's WCDMA network, which currently reaches about 70 per cent of the country. Telecom plans to launch a new 850MHz WCDMA network in June next year.
Vodafone says its network will run at speeds of up to 7.2 megabits per second. The EVDO network is slower, but when the new network goes live with HSPA+ (Evolved High Speed Packet Access)capability it will give a theoretical maximum of 21Mb/s downstream and 5.7Mb/s up. Telecom says it will have a 97 per cent reach at launch.
Vodafone spokesman Paul Brislen says the company welcomes the Commerce Commission's investigation.
"We have no problem with the our advertising," he said. "Telecom itself has called EVDO a technology cul-de-sac."
"They say they're the fastest, which we don't think they are - so we will keep advertising."
Ernie Newman of TUANZ (Telecommunications Users Association of New Zealand) applauds the investigation.
"It's time that both our major phone companies put a leash on the extremism of their marketing people," he said.
"Buying telecommunications is highly complex and difficult for the average non-technical people, and this kind of skirmish with marginally correct statements only serves to confuse consumers and make the entire industry look bad."
Newman compares the current tit-for-tat mobile phone marketing approach to broadband speed claims made a few years ago.
"The industry itself, to its credit, reigned it in. We would like to see the same thing happen here."
