Commerce Commission asks One NZ to stop '100% mobile coverage' campaign
The country's second biggest telecommunications concern, One NZ, formerly Vodafone, has been asked to stop its high-profile 100 percent mobile coverage advertising campaign.
The Commerce Commission has made the request because it believes the campaign is misleading and may breach the Fair Trading Act.
The regulator said the advertising did not make clear there are limitations to what will be available from One NZ when it links up with Elon Musk's Starlink satellite network.
Commission chair John Small said the adverts were possibly false and misleading, and might distort competition.
"In our view, the claims are misleading because they give an overall impression that all currently available mobile services will be supported from next year, instant communication will be available and the 100 percent mobile coverage will be available from locations where in fact, that may not be the case where there is no line of sight to the sky."
He said text messaging would only be available in later 2024, voice and data sometime in 2025, and transmission would on average take two minutes.
Small said there was also no explanation of what was meant by "line of sight to the sky".
"The requirement for line of sight to the sky may significantly reduce the usefulness of the service in a way consumers would not expect, which is not apparent from the claims."
The Commission has given One NZ until Wednesday 12 July to reply, and said legal action was possible.
One NZ said it was reviewing the Commission's letter, but defended the language used in the adverts.
"The fact is the Starlink space satellites that enable the service will cover 100 percent of New Zealand, so we think it's valid to talk about 100 percent mobile coverage," head of corporate affairs Conor Roberts said in a statement.
"We've been clear that the service will launch with text messaging in late 2024 to be followed by voice calling and data in 2025."
"We've also explained that you'll be able to connect to the coverage where you have line of sight to the sky. That clearly means it's unlikely to work inside caves or dense buildings, much like your current mobile use where there are some connectivity constraints."
The Commission's letter to One NZ noted the company saying television advertising was supposed to end earlier this week, but it complained that what it regarded as the misleading claims were still on the telco's website, and even the advertising stopped consumers might still be misled.
"The Commission will monitor One NZ's response to this letter, as well as any continued representations made as part of the current or new advertising campaigns, and consider appropriate legal action to enforce the FT (Fair Trading) Act."