The Star: May 19, 2022

The Star Thursday May 19 2022
20
BUSINESS
Latest Canterbury news at starnews.co.nz
Vodafone, Commerce Commission
both appeal record $2.24m fine
• By Chris Keall
VODAFONE NZ and the
Commerce Commission both
say they’ll appeal a $2.24 million
fine over the telco’s historic
“FibreX” marketing.
The regulator says the fine,
which was handed down in the
Auckland District Court on
April 14, is too low to act as a
deterrent.
The telco wants to overturn
both the fine and the High
Court conviction that led to the
penalty.
On April 3 last year, Vodafone
was found guilty of misleading
consumers with its 2016-2018
“FibreX” marketing campaign
for the hybrid fibre-coaxial (aka
copper) cable service it offers in
parts of Christchurch, the Kapiti
Coast and Wellington. It began
as a cable TV service operated by
Telstra Saturn, and was inherited
by Vodafone when it bought
TelstraClear in 2012. Vodafone
says it’s spent tens of millions on
upgrades since.
Charges were brought under
the Fair Trading Act and the
telco faced potential fines of
up to $16m. The ComCom had
sought a $5.8m penalty.
Judge Pippa Sinclair found
Vodafone’s branding and advertising
was liable to mislead
MARKETING: Fibre X promoted at a Vodafone store in October 2017.
PHOTO: CHRIS KEALL/NZ HERALD
consumers into thinking that the
FibreX branded service was part
of the UFB fibre network.
She rejected Vodafone’s argument
that consumers would
understand that FibreX was a
“fibre-like” network delivering
superfast reliable broadband but
not pure fibre, due to the ‘X’ in
its name.
Commerce Commission
chair Anna Rawlings said this
morning that the $2.25m fine
did not appropriately reflect the
seriousness of the offending, and
the size and financial resources
of Vodafone.
The commission will argue
in its appeal that Vodafone’s
conduct was wilful, rather than
grossly careless, and allowed
Vodafone to make significant
commercial gains, Rawlings said.
“The fines imposed for this
type of offending must be
significant enough to deter
Vodafone and other large
businesses from engaging in this
type of conduct in the future.”
“We are very disappointed
with the outcome and
respectfully disagree with the
court’s decisions,” Vodafone NZ
said in a statement.
“Our appeal will set out
our strong belief that there
are several errors with the
original conviction decision
and that there are aspects of the
FibreX judgment that simply
misunderstand the services
we sell and are not in the best
interests of consumers or future
competition.”
The telco says its HFC service
does indeed offer fibre-like
service, and says that has been
proven by the Commerce
Commission’s own benchmark
testing, which found that, in
Vodafone’s summary, 100 per
cent of HFC Max plans were all
able to stream four simultaneous
UHD (ultra high definition or
4K) Netflix streams, offering an
equivalent experience to Fibre to
the Home plans in this respect.
The twin appeals come a
day after the telco industry
introduced two new marketing
codes, at the Commerce
Commission’s direction, which
are aimed, in part, at boosting
customer rights and making
it easier to compare different
broadband options.
—NZ Herald
Merger, acquisition activity still high – PwC
• By Jamie Gray
MERGER AND acquisition
(M&A) activity in New Zealand
remained high in the first
quarter, with private equity
investors again featuring
prominently, PwC said.
Corporate activity in the
education technology sector is
booming and PwC said it was
not seeing any signs of a slowdown.
Deal volume is in line with
levels seen throughout 2021 – a
record year, PwC said.
A number of 2021 deals also
continued into 2022 and have
been announced in this first
quarter.
Healthcare and educational
technology featured strongly in
the data.
Significant levels of deal activity
continued during the first
quarter of 2022 with 45 deals
completed or announced.
“While this is below the
numbers we saw in Q2, Q3, and
Q4 of 2021, it is still considerably
higher than pre-pandemic levels
and more than Q1 2021,” PwC
said.
Regan Hoult, corporate
finance leader at PwC told the
Herald M&A activity had driven
by a combination of factors.
“Looking at the data, there
has been strong international
interest.
“The other
theme that came
through was
strong private
equity activity
throughout the
quarter.
Regan
Hoult
“We continue
to see private
equity, both on
the demand
side of transactions – being big
acquirers of businesses and also
ultimately suppliers of businesses,”
he said.
Low interest rates have helped
corporate balance sheets and
how they look at acquisitions.
“Institutions are looking at
private equity as an asset class
that can provide strong returns
against the other asset classes,
which ultimately flows through
into deal activity.
“Yes, there are definitely headwinds
around inflation, supply
chains, rising interest rates and
the geopolitical situation, but
there is still a lot of private equity
capital looking to invest,” Hoult
said.
Corporates “may sit on their
hands”, focus on their balance
sheets, and look at their strategy
in the current environment.
“With the challenges that
STEADY: PwC says private equity investment in New
Zealand companies has continued unabated in the first
quarter.
PHOTO: NZ HERALD
come up through supply chain
issues and inflation, consolidation
can often be something that
can drive value,” he said.
In its report, PwC said that in
education technology (EdTech),
products that demonstrate
improved learning outcomes
and means of adapting learning
to changing learner and teacher
expectations are increasingly
sought after.
Since the beginning of the
Covid-19 outbreak in early 2020,
PwC has advised on three New
Zealand based EdTech transactions
with international investors
– Totara Learning, Education
Perfect, The Mind Lab.
Buyer interest in the sector
was not showing any signs of
reducing
PwC expects to see robust deal
activity continue throughout
2022 due to the significant
amounts of capital still available
in the market.
“Strong valuations and increasing
market uncertainty may
lead to business owners wanting
to accelerate the timing of exits.”
PwC cross-border deal flow
was strong in the quarter -–20
of the 45 deals involved offshore
buyers.
Australia (nine deals) and the
USA (six deals) continued to drive
international buyer activity.
The technology, media and telecoms
(TMT) sector continued
to see the most activity, while
financial services and industrials
and chemicals also featured
prominently.
TMT (14 deals) accounted for
almost a third of all activity during
the quarter.
Nine of the 45 deals announced
during Q1 2022 involved
a private equity buyer.
Over the last couple of years
M&A activity in the healthcare
sector had significantly increased
and valuations were higher than
ever before, PwC said.
There have been a number of
substantial transactions in recent
months including the sale of
Evolution Healthcare, Canopy
Cancer, Fertility Associates,
Pacific Radiology, Obex Medical
and The Selwyn Foundation’s
aged-care assets.
Work on healthcare-related
transactions in the past year
would represent circa 20 per cent
of PwC’s M&A related work.
“Covid-19 has heightened
investor awareness in the healthcare
sector and the importance
of the health system, leading to
increased interest and activity,”
the report said.
—NZ Herald