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The Commerce Commission is filing criminal charges against One NZ for representations made in its campaign promoting “100 per cent mobile coverage. Launching 2024″.
Deputy chair Anne Callinan said the commission was concerned that the headline representations made during the campaign could be misleading and distort competition in the telecommunications market.
“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 and that consumers would have access to instant communication from all locations in New Zealand when, in fact, that may not be the case,” Callinan said.
“One NZ’s initial advertising campaign featured absolute and unqualified claims about mobile coverage that did not make the limitations, which we believe are significant, clear to consumers.”
One New Zealand head of corporate affairs, Nicky Preston, said the telco would defend the charges “vigourously”.
The charges related to a three-month campaign about a new network technology, which was approximately 18 months away from launching, Preston said. The technology, therefore, 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,” she said.
The commission said it was particularly concerned about initial coverage limitations for text messaging, the need for line of sight to the sky for service and a two minute delay on text messages.
“The requirement to have line of sight to the sky may significantly reduce the usefulness of the service, which is not apparent from the claims,” Callinan said. “Not knowing these limitations may have influenced consumers’ purchasing decisions.”
In April 2023, in support of its rebrand from Vodafone NZ, One NZ launched the multimedia advertising campaign to promote its proposed future satellite direct-to-cell mobile phone service provided in collaboration with SpaceX.
The contract between One NZ and SpaceX requires SpaceX to operate, own, and launch a fleet of low earth orbit satellites and ground network infrastructure to provide satellite direct-to-cell services to One NZ.
The Commerce Commission issued a “Stop Now” letter to One NZ in June 2023 for representations made in its campaign.
One NZ’s Preston said the language used in the promotion was consistent with long-standing practice of how coverage is described by the industry and the regulator.
“Other telcos globally have used similar statements and we’re not aware of regulatory issues regarding these,” she said.
“We are concerned with the Commission’s approach and strongly disagree with the basis for this legal action.”