The Commerce Commission says it’s filing criminal charges today against One NZ for representations made in its campaign promoting “100% mobile coverage” launching this year which might have breached the Fair Trading Act. 

“One New Zealand will vigorously defend the legal charges laid by the Commerce Commission,” One NZ head of sustainability and corporate affairs Nicky Preston said. 

“The charges relate to a three-month advertising campaign about a new network technology, which was approximately 18 months away from launching, and was not being marketed for purchase.” 

On April 1 last year, when the now Infratil-owned telco rebranded from Vodafone NZ, chief executive Jason Paris said his firm signed an exclusive partnership with Starlink to provide a “celltower in the sky” service through the satellite network operator’s pending Direct to Cell service. 

Starlink is owned by Elon Musk’s SpaceX. 

Just over three months later, on July 5, the ComCom sent OneNZ a “stop now” letter targeting the 100% coverage campaign. 

The watchdog made similar points to those in its statement today about its legal action. 

It 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, but it had “concerns about the following limitations”: 

• The coverage would initially provide only the ability to access text messaging (SMS and MMS) and under the arrangements between One NZ and SpaceX, it was expected the initial service would be available from 2024 – potentially as late as December 31. 
• The coverage would be accessible only in locations where a consumer’s mobile phone had line of sight to the sky. That meant 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, rather than the impression conveyed in the campaign of near-instantaneous service. Although Starlink has some 6000 satellites in low-Earth orbit, larger second-generation models have had to be launched to support Direct to Cell, and so far several hundred have been launched. 

One NZ rejected the claims. It said it was switching to “Coverage like never before, launching 2024″ in a change that had always been planned. 

Although initial limitations weren’t captured in the “100% mobile coverage” tagline that headlined One NZ’s initial ads, Paris was explicit about them in his launch speech, including his statement that voice and data services would be added in 2025. 

Paris told the Herald at launch: “The ambition is that there will be no more than a minute-and-a-half intervals within any given hour where a text message can’t be sent or responded to. And that basically means we need a certain number of satellites up in the sky to make that happen.” 

“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,” Preston said this morning. 

“The Commerce Commission’s decision to bring these charges could have significant implications across the entire telecommunications sector regarding how coverage and service availability are described and marketed,” Preston said. 

“Our language was consistent with long-standing practice of how coverage is described by the industry and the regulator in New Zealand. Other telcos globally have used similar statements and we’re not aware of regulatory issues regarding these. 

“We are concerned with the commission’s approach and strongly disagree with the basis for this legal action. 

“We remain confident that SpaceX will be able to deliver mobile coverage across New Zealand, and our testing is demonstrating this.” 

Delays in US 

One NZ has been promoting successful SpaceX Direct to Cell tests on its social media over the past couple of weeks. 

But in September the telco (and Optus across the Tasman and other Direct to Cell exclusive partners) removed “launching 2024″ references from its website. 

While the global Direct to Cell service has received necessary approvals in the US, it hit turbulence with the Federal Communications Commission in the US where Starlink is partnering with T-Mobile. 

Rival telcos AT&T submitted to the FCC on August 14 that the service would cause interference with their terrestrial mobile networks. 

Two rival satellite firms, Ominispace and the Apple-backed Echostar (which enables the iPhone SOS via Satellite feature – already in active use in NZ), also asked the FCC to block SpaceX’s waiver. 

Spark and 2degrees are planning to launch similar satellite mobile services through Lynk, a putative rival to Starlink. Both have carried out successful tests but have yet to give a timeline to launch. 

One NZ hasn’t commented on the cost or exclusivity period for its Starlink Direct to Cell partnership. On X, Musk posted that T-Mobile’s exclusive period would be one year. 

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 and the ComCom both declined further comment on the “100% coverage charges” saying the matter was before the courts. 

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.