The Commerce Commission has filed criminal charges against One NZ, previously known as Vodafone NZ, over claims made in a campaign promoting “100% mobile coverage. Launching 2024.”
The Commission believes the advertising may have breached the Fair Trading Act, misleading consumers about the extent of coverage the new service would offer.
Commerce Commission Deputy Chair Anne Callinan said the Commission was particularly concerned about the campaign’s “headline representations,” which may have misled consumers and skewed competition in the telecommunications sector.
“In our view, the claims were likely to mislead consumers because they gave an overall impression that all currently available mobile services – text messaging, voice calling, and data – would be supported and available from 2024,” said Callinan. “One NZ’s campaign suggested that consumers would have access to instant communication from all locations in New Zealand when, in reality, that may not be the case.”
The Commission raised specific concerns about limitations in the advertised coverage. Initially, the service will offer only text messaging (SMS and MMS) from 2024, with launch dates possibly as late as December 31. Further, the satellite-based service requires direct line-of-sight to the sky, meaning users may struggle to access it from inside buildings, cars, or under tree coverage. Additionally, there would be an average two-minute delay for sending and receiving messages, despite the campaign suggesting near-instantaneous communication.
“The requirement to have line-of-sight to the sky may significantly reduce the usefulness of the service, which is not apparent from the campaign’s claims,” Callinan added. “Not knowing these limitations may have influenced consumers’ purchasing decisions.”
One NZ launched its rebranding campaign from Vodafone NZ in April 2023, promoting a future satellite direct-to-cell mobile service developed with SpaceX. Under this partnership, SpaceX would operate a network of low Earth orbit satellites to provide the direct-to-cell coverage.
However, following the campaign, the Commerce Commission issued a “Stop Now” letter in June 2023, urging One NZ to halt representations promoting “100% mobile coverage” until the service’s limitations were more transparently communicated.
One NZ responds
A company spokesperson said “In April 2023, we announced a partnership with SpaceX, which we said will bring coverage to all parts of New Zealand, effectively ending mobile blackspots. This ground-breaking technology will help keep New Zealanders safer and more connected.
“One New Zealand will vigorously defend the legal charges laid by the Commerce Commission. The charges relate to a three-month advertising campaign about a new network technology, which was approximately 18 months away from launching, and was not being marketed for purchase.
“The Commerce Commission’s decision to bring these charges could have significant implications across the entire telecommunications sector regarding how coverage and service availability are described and marketed.
“Our language was consistent with long-standing practice of how coverage is described by the industry and the regulator in New Zealand. Other telcos globally have used similar statements and we’re not aware of regulatory issues regarding these.
“We are concerned with the Commission’s approach and strongly disagree with the basis for this legal action.
We remain confident that SpaceX will be able to deliver mobile coverage across New Zealand, and our testing is demonstrating this.”
