New Zealand’s Commerce Commission (ComCom) has filed criminal charges against One NZ, alleging that the telecommunications company’s marketing campaign for its upcoming Starlink Direct-to-Cell service misled consumers and breached the country’s Fair Trading Act.
In April 2023, One NZ launched an advertising campaign to promote its partnership with SpaceX, touting “100% mobile coverage.” The campaign promised consumers text messaging initially, with future plans for voice and basic data services. However, ComCom contends that the campaign failed to clearly communicate critical limitations of the service, including:
- Limited Functionality at Launch: Only SMS and MMS capabilities would be available, with no voice or data services initially.
- Line-of-Sight Requirements: The service requires an unobstructed view of the sky, making it inaccessible inside buildings, vehicles, or under dense foliage.
- Message Delays: Text messages would experience an average two-minute delay, contrary to the implied near-instantaneous connectivity.
In a statement, ComCom Deputy Chair Anne Callinan said that One NZ’s claims gave the misleading impression of comprehensive and instant mobile coverage, potentially distorting competition in the telecommunications market. “Not knowing these limitations may have influenced consumers’ purchasing decisions,” Callinan stated. (via Radio NZ)
One NZ has vowed to “vigorously defend” the charges, arguing that its campaign included necessary disclaimers and adhered to industry norms. The company maintains that its language was consistent with practices in New Zealand and internationally, with similar claims made by other companies without regulatory repercussions.
OneNZ recently began testing Starlink’s DTC service, and was able to successfully send the first text message from an unmodified smartphone. The test was the first part of a comprehensive testing program taking place across the country to ensure the reliability of the service in various real-world conditions.
