The Commerce Commission has issued a Stop Now Letter to One NZ (formerly Vodafone NZ) for representations made in its campaign promoting “100% mobile coverage. Launching 2024”.
Commerce Commission Chair, John Small, says the Commission’s early investigation into representations made in One NZ’s campaign – across various media and advertising channels – raised concerns that the conduct may be in breach of the Fair Trading Act and that consumers are being harmed, and that it could distort competition in the sector.
The Stop Now Letter identifies the Commission’s most significant concerns about One NZ’s claim – “100% mobile coverage. Launching 2024” – as being potentially false and/or misleading. These concerns arise from the absolute and unqualified nature of the claim and that the majority of the advertising does not make it clear that limitations apply to the mobile coverage. In particular:
- The coverage will only provide the ability to access text messaging (SMS and MMS only) from late 2024; and
- The coverage will only be accessible in locations where a consumer’s mobile phone has line of sight to the sky. The promotional material does not explain what this means.
The Commission believes that the claim – “100% mobile coverage. Launching 2024” – is likely to be understood by consumers as the ability to access all current mobile services – text messaging, voice calling and data – in all locations in New Zealand, at all times, from 2024.
However, the ability to access text messaging will only be late in 2024 (potentially as late as 31 December) with voice and data services following later in 2025. Text messaging send and receive times will also initially average 2 minutes, rather than the typical expectation 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 the 100% 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,” Dr Small says.
“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 requested that One NZ cease and not recommence making the representations without providing prominent qualifying information that explains the limitations of its coverage.
Dr Small says the Commission will continue to monitor the use of all representations made by One NZ with regard to this campaign, across all communications and platforms, and may consider further action as appropriate.
Only the courts can decide if there has been a breach of the Fair Trading Act.
A copy of the Stop Now Letter is available on the Commission’s website here.
