The Commerce Commission has taken One NZ to court over its claims of “100% mobile coverage” launching this year. The telco, which rebranded from Vodafone NZ in April 2023, signed an exclusive partnership with SpaceX’s Starlink to provide a “celltower in the sky” service through their Direct to Cell service. However, the Commission has raised concerns about the limitations of this technology and how it was marketed.

Understanding The Main Concept

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One NZ had launched a new network technology campaign promising “100% mobile coverage” launching this year. However, the Commerce Commission argues that the telco made misleading claims about its partnership with SpaceX’s Starlink. The Commission is seeking criminal charges against One NZ for breaching the Fair Trading Act.

Key Points to Consider

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* One NZ claimed it would offer 100% mobile coverage across New Zealand, but the Commerce Commission argues this was an exaggeration.
* The telco signed an exclusive partnership with SpaceX’s Starlink to provide a “celltower in the sky” service through their Direct to Cell service.
* However, the initial coverage will only be accessible from locations where a consumer’s mobile phone has line of sight to the sky.

How This Works In Practice

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The Commerce Commission made similar points to those in its statement about the legal action. The watchdog had sent One NZ a “stop now” letter targeting the 100% coverage campaign three months after it was launched.

Key Points from the Statement

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* The Commission did not dispute that Starlink’s Direct to Cell would offer mobile coverage from nearly anywhere in NZ and 12 nautical miles out to sea.
* However, the Commission had “concerns about the following limitations”:
* Initial coverage would only provide the ability to access text messaging (SMS and MMS).
* The initial service was expected to be available from 2024 – potentially as late as December 31.
* Coverage would be accessible only in locations where a consumer’s mobile phone had line of sight to the sky, meaning users might not be able to access the service inside a building, car, or underneath tree coverage.
* Sending and receiving texts would initially have a two-minute delay, on average.

Why This Matters For Business

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This case highlights the importance of accurate advertising and marketing. One NZ’s claims of “100% mobile coverage” could have significant implications for other telcos in New Zealand, regarding how coverage and service availability are described and marketed.

Key Takeaways for Businesses

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* Be careful when making claims about your products or services.
* Ensure that any marketing materials are accurate and comply with relevant regulations.

The telco has been in a series of legal tangles with the ComCom over the past few years, including a tussle over its “FibreX” branding that led to a $3.6m penalty under the Fair Trading Act in August last year, and court action initiated by the regulator earlier this year over alleged breaches of the 111 Contact Code.

One NZ’s Response
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The telco has declined further comment on the matter, stating that it is before the courts.