The case is the latest in an extended effort from the regulator to improve transparency for consumers from One NZ and the broader telecoms sector
The Commerce Commission filed criminal charges against One NZ, alleging the operator’s marketing misled consumers and distorted competition
On 14 November 2024, the New Zealand’s Commerce Commission (ComCom) filed criminal charges against One NZ over the operator’s mobile coverage claims. The regulator alleges that One NZ’s advertising claims of “100% mobile coverage. Launching 2024” were misleading and may have breached the Fair Trading Act in distorting competition in the mobile market. One NZ’s marketing campaign was launched following an April 2023 announcement of the operator’s partnership with SpaceX to provide direct-to-device (D2D) satellite connectivity for mobile customers. The operator received a ‘Stop Now letter’ from the Commerce Commission in July 2023 over concerns with the campaign’s claims and later amended its advertising to state “Coverage like never before, launching 2024″. The case, which is expected to encompass multiple criminal charges against One NZ, will be tried before the Auckland District Court.
The regulator took issue with One NZ’s alleged failure to report the limitations of satellite connectivity and to meet expectations set out in the campaign
In announcing the charges, Anne Callinan (Deputy Chair, ComCom) described the marketing claims made by One NZ as “absolute and unqualified”. The regulator cites a number of key limitations or unmet expectations that it says the operator’s claims did not adequately communicate, which likely influenced the purchasing decisions of some consumers, including:
While the service was said to be launching in 2024, it is unlikely that One NZ achieves more than a beta testing period before the end of the year;
The initial service launch will only support text messaging, with voice and data capability following later in 2025;
Coverage will only be available when a consumer’s device has a line of sight with the sky, limiting availability indoors, in cars or under trees; and
Text messaging will be subject to a two minute delay on average, unlike the impression conveyed that service would be near instantaneous.
Though some claims reflect a concern about a lack of consumer understanding of the technical limitations of satellite connectivity, ComCom also contends that One NZ’s advertising may have misled consumers in much simpler and preventable ways, including with the claims of a 2024 service launch.
The operator emphasised its alignment with domestic and international practices in advertising network coverage
One NZ responded to the charges by noting that the marketing claims were part of a relatively short (three month) advertising campaign that was underway 18 months before the launch of services. The claims made in these advertisements were therefore not intended to market services for purchase but instead to inform consumers about a new network technology. The operator also notes that it believes its use of language, specifically in discussing “coverage”, was consistent with the long-standing practice of both industry and the regulator in New Zealand, as well as with the statements made by other operators around the world. Specifically, the operator’s choice of the word “coverage” over “connectivity” is not intended to imply any level of service availability. In criticising ComCom’s decision to press charges, One NZ notes that this decision will significantly impact how the whole telecoms sector describes and markets its coverage and services moving forward.
The charges are the latest in a series of actions from the regulator seeking to improve transparency from One NZ and the sector at large
ComCom's filing is not the first action it has taken to attempt to influence the advertising practices of One NZ and the broader sector. In 2023, the High Court upheld a record setting NZ$3.7m (£1.7m) fine issued by the regulator against One NZ for violating the Fair Trading Act with its advertising for its FibreX offering. The court found that the operator had misled consumers about the underlying technology of the connections sold through FibreX tariffs, falsely implying that the network’s hybrid connections were in fact full fibre. In years since, ComCom has stated that it believes progress has been made in the transparency of how the underlying technology of connections is marketed but seeks to support consumers in comparing and selecting the best service for their needs as they transition away from copper. In October 2024, the regulator launched a consultation on updating its Broadband Marketing Guidelines to strengthen the transparency requirements on how operators report expected quality of service. In its response to the consultation, wholesale-only fixed operator Chorus argued that ComCom should extend performance reporting requirements on 5G services, suggesting that consumers may not have the information needed to be fully aware of the expected performance of 5G mobile and 5G fixed wireless access services. Even as the charges against One NZ now move before courts, Chorus contends the regulator still has additional work to do to improve advertising standards in the mobile market.
