An advertising campaign promoting "100% mobile coverage. Launching 2024," has landed One NZ in legal hot water, with the Commerce Commission filing criminal charges against the telco over the claims.
The Commission believes the ad campaign may have breached the Fair Trading Act. Its deputy chair Anne Callinan said the consumer watchdog is concerned the campaign headline 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.
On its part, One NZ intends to fight the Commission's charges, saying the campaign was about new network technology that was 18 months away from launching and not marketed for purchase.
"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," Nicky Preston, One NZ's head of corporate affairs sad in a statement.
Nevertheless, the Commission is concerned that the ad campaign made absolute and unqualified claims about mobile coverage, without making limitations clear to customers.
Limitations that the Commission believes are significant, such as the SpaceX service only providing text messaging which may arrive as late as December 31 this year.
Another limitation is the requirement that customers' phones have a line of sight to the sky. Subscribers won't be able to access the SpaceX service inside buildings, in cars or underneath trees, the Commission said.
"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,” Callinan said.
Furthermore, on average, sending and receiving text messages will initially have a two-minute delay. The campaign conveyed the impression of near instantaneous service, the Commission said.
The Commission already put an end to One NZ's campaign in June last year, with a Stop Now Letter.
Preston added that One NZ strongly disagrees with the basis for the Commission's legal action, and remains confident that SpaceX will be able to deliver mobile coverage across New Zealand.
She said One NZ's testing is demonstrating the SpaceX mobile coverage.
In August last year, One NZ received a record $3.675 million fine, the highest ever handed out under the Fair Trading Act, for representations made during the marketing of the telco's FibreX service. One NZ was found guilty of misleading customers that FibreX was a fibre-to-the-premises service when it was not, and that it was the only available broadband service to certain addresses which wasn't the case either.
3 Comments
I don't care if its only texts with 100% coverage but they are fast running out of time to get it done this year. They cannot even get a list of compatible phones out there and no doubt you need a possible Software update as well, which is outside of One NZ's control.
One.NZ/Voda is the most fined company under the Fair Trading Act by some distance going back at least 20 years.
They treat the fines as a cost of doing business.
The ComCom should make this cost untenable to the shareholders.
I launched Mobile Broadband in NZ and have worked for both One and Spark before getting bored with telco.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.