New Zealand hits Starlink with criminal charges
November 18, 2024
By Chris Forrester
New Zealand’s Commerce Commission has hit local telco One NZ (the former Vodafone NZ) with criminal charges alleging false representations of its Starlink Direct-To-Cell service, and breaching the country’s Fair Trade Act.
One NZ had seemingly jumped the gun with its Starlink publicity and marketing campaign and talked about 100 percent national coverage but failed to mention that it would only include text messages, and that the user’s cellphone needed to have ‘line of sight’ to the sky and thus could not handle messages when inside buildings, or in a car or simply under a tree.
One NZ’s marketing campaign had not mentioned that the sending and receiving of texts would initially have a two-minute delay, on average, rather than the impression conveyed in the campaign of near-instantaneous service.
Commerce Commission Deputy Chair, Anne Callinan, says the Commission is concerned that the headline representations made during the campaign could be misleading and distort competition in the telecommunications market.
“In our view, the claims were likely to mislead consumers because they gave an overall impression that all currently available mobile services — text messaging, voice calling, and data — would be supported and available from 2024 and that consumers would have access to instant communication from all locations in New Zealand when, in fact, that may not be the case,” Callinan said.
The Commission added: “One NZ’s initial advertising campaign featured absolute and unqualified claims about mobile coverage that did not make the limitations, which we believe are significant, clear to consumers.”
The background to the claim explains that in April 2023, in support of the rebrand from Vodafone New Zealand, One NZ launched a multimedia advertising campaign to promote its proposed future satellite direct-to-cell mobile phone service provided in collaboration with SpaceX. The contract between One NZ and SpaceX requires SpaceX to operate, own, and launch a fleet of low earth orbit satellites and ground network infrastructure to provide satellite direct-to-cell services to One NZ.
The Commission, as far back as June 2023, had issued a ‘Stop now’ notice on One NZ in response to the cellular operator’s claim that it would offer “100 per cent mobile coverage. Launching 2024”.