The Commerce Commission has sent a Stop Now Letter to One NZ (previously Vodafone NZ) for claims made in its “100 per cent mobile coverage. Launching in 2024” ad campaign.

According to John Small, the commission chair, the regulator’s preliminary investigation into representations made in One NZ’s campaign across various media and advertising channels raised concerns that the conduct may violate the Fair Trading Act, that consumers are being harmed, and that it may distort competition in the sector.

The Stop Now Letter expresses the commission’s concern that the majority of the advertising does not make it clear that mobile coverage is subject to limitations. More specifically:

• From late next year, the coverage will only allow access to text messaging (SMS and MMS). 
• The coverage will be available only in areas where a consumer’s mobile phone has a clear line of sight to the sky. This is not explained in the promotional materials.

The commission considers that consumers will interpret the promise “100 per cent mobile coverage. Launching 2024” as the ability to use all existing mobile services – text messaging, phone calls, and data – in all areas in New Zealand, at all times, beginning next year.

However, access to text messaging will not be available until late in next year (perhaps as late as December 31), with phone and data services arriving later in 2025. Text messaging send and receive delays will initially average two minutes, as opposed to the traditional assumption of near-instantaneous transmission. 

“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 100 per cent 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,” said Small.

“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 told One NZ to discontinue making the statements without clearly stating the restrictions of its coverage.