ComCom takes legal action over One NZ’s ‘100%’ coverage claims for SpaceX service

Published14 Nov 2024

The Commerce Commission is today filing criminal charges against One NZ (formerly Vodafone NZ) for representations made in its campaign promoting “100% mobile coverage. Launching 2024,” which the Commission believes may have breached the Fair Trading Act.

Commerce Commission Deputy Chair, Anne Callinan, says the Commission is 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,” Ms Callinan says.

“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.”

The Commission is particularly concerned about the following limitations

The coverage will initially provide only the ability to access text messaging (SMS and MMS only) and under the arrangements between One NZ and SpaceX, it is expected that the initial service will be available from 2024 – potentially as late as 31 December.

The coverage will be accessible only in locations where a consumer’s mobile phone has line of sight to the sky. This means users may not be able to access the service inside a building, a car, or underneath tree coverage.

Sending and receiving text messages would initially have a 2 minute delay, on average, rather than the impression conveyed in the campaign of near instantaneous service.

“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. Not knowing these limitations may have influenced consumers’ purchasing decisions,” Ms Callinan says.

Background

In April 2023, in support of the rebrand from Vodafone New Zealand Ltd, One NZ launched a 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 promoting “100% mobile coverage. Launching 2024”.