Chorus 'deeply uncomfortable' with Spark home-phone sales move

Wednesday, 12 June 2019

The customers targeted by Spark's sales initiative would tend to be older, Chorus said, and it was concerned they might feel they had to follow its instructions.

Spark has been accused by Chorus of using a controversial sales practice known as 'inertia selling' to encourage customers with copper-line home phones to switch to an alternative phone service that uses Spark's wireless network.

Spark has rejected the accusation and says it is moving customers on to more modern and generally cheaper technology.

Chorus spokesman Steve Pettigrew said Chorus was 'deeply uncomfortable' with Spark's actions and had needed to field 'two or three inquiries' from MPs after concerns were raised by their constituents.

Pettigrew said it appeared people had been told by Spark that Chorus was pulling out its copper network, and that home phone customers needed to move on to wireless technology.

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Pettigrew said there was no timetable for closing down its copper network, which would remain available across the country for 'at least' the next several years.

Even then, closures would only occur in areas where a fibre-optic alternative was readily available, he said.

He understood that Spark had been writing to customers giving people a date to 'opt out' of a move off the copper network.

'If you ring up you are told that wireless is the future and that Chorus is switching off the copper network and now would be a good time to migrate to new services.'

If customers agreed, they were sent a kit enabling them to switch to a wireless phone service.

'If you don't respond by the date they will ship one out to you,' he said.

Pettigrew believed it was inertia selling.

He said the approach had been focused on customers who only had a landline, rather than other services such as broadband.

'They tend to be older and if someone tells you to 'do this', you do this. I feel really uncomfortable that is a method and an approach,' he said.

Spark spokeswoman Lucy Fullarton confirmed the company had begun a new initiative to move some of its customers who only had a home phone with Spark 'from a copper line service to a modern wireless solution'.

'These customers are being moved to a new open term wireless landline plan, which comes with unlimited local calling, a starter pack with two phone handsets, a modem and a power back-up unit for use in power outages, a dedicated customer support transition team, all at a monthly price below what most pay today for their copper service,' she said.

She agreed there was not yet a timeline in place for the withdrawal of copper network services, but said Spark believed the time was right to 'start helping our customers with the transition, with an initial focus on those customers for whom the change should be relatively straightforward'.

If customers did not connect the wireless modem that was delivered to them, they would continue to be billed for their current plan, she said.

'If there are reasons why a customer can't move across – like reliance on a special handset, an alarm that doesn't work on wireless or some other special need then we won't move them while we discuss and evaluate other options with them,' she said.

'In addition, there may be customers who could be considered 'vulnerable', for whom the migration will need to be managed differently. We do, however, intend to work with them on a migration plan suitable for their particular needs.'

Spark's wireless phone service costs $50 a month, while a copper-line phone service costs $61.15 if a $4.95 wire maintenance fee – unnecessary with wireless broadband – was included.

If customers decided 'not to proceed with this modified wireless landline service' they would be sent a 'fully paid courier bag and asked to return the connection kit', Fullarton said.

The rows marks a new front in a battle between Chorus and Spark over what Chorus has viewed as the aggressive market of wireless broadband by Spark and unduly negative comments by Spark about the performance and reliability of its copper broadband network.

Spark has responded in the past that its customers have expressed higher customer satisfaction after moving from Chorus' copper network to its own wireless broadband network.

Pettigrew could not say whether Chorus was considering taking any action.

'But it probably mostly falls on individuals to take their concerns to consumer groups,' he said.

The Ministry of Business, Innovation and Employment says that it is a breach of the Fair Trading Act for companies to send 'unsolicited products or services – when you receive products or services you didn't ask for or order'.

'The only exceptions are electricity and piped gas,' its website says.

Fullarton said Spark would argue that the wireless equipment it was sending out did not constitute 'unsolicited goods, which we understand are what is involved in a situation of inertia selling'.

'This is because Spark already provides a landline service to these customers [and] we are now modifying how we deliver this landline service so that it is delivered over Spark's 4G network rather than the copper network,' she said.

'Customers are not required to purchase this kit from us – we provide the kit to them so that they can continue to receive their existing landline service from Spark.'

Spark now explained in letters sent to customers that they didn't need to pay for the equipment and that it was 'on us and you don't have to pay for any damage unless you deliberately cause the damage'.

The letters said if customers didn't need the equipment kit, they should contact Spark and it would arrange a courier for its return, she said.