One NZ learns the hard way, don’t rely on Elon Musk

Analysis: You don’t get into bed with Elon Musk unless you’re ready for a pillow fight. Donald Trump knows that. OpenAI founder Sam Altman knows it. Europe’s richest man Bernard Arnault knows it. Nasa knows it, after Musk’s SpaceX tried and failed to rescue its two stranded astronauts.
And One NZ boss Jason Paris will discover it.
The Commerce Commission is today filing criminal charges against the telco over its “100% mobile coverage,” campaign, pointing out that One NZ’s partnership with SpaceX will only deliver SMS and MMS at first, that messages will take two long minutes to send, that it will only work where there’s line of sight to the sky, and it won’t make its promised 2024 launch date.
One NZ doesn’t dispute any of this, but does believe the commission is being too pedantic in its application of the word “coverage”. The telco relies on a slightly esoteric but material distinction between “coverage” and “connectivity”.
And to be fair, they have a point. Nobody would seriously expect 100 percent to really be 100.00 percent. I don’t expect to be able to use my cellphone under my tinfoil hat in my lead-lined basement. Nor anywhere in Dress Smart Onehunga, which I’ve long since accepted is a black hole for connectivity.
But what I would say is that One NZ trusted too heavily in the assurances of Elon Musk and his companies, rocket firm SpaceX and satellite constellation Starlink. They, and other companies like T-Mobile in the US and Optus in Australia, sold their product to customers with the promise to deliver 100 ercent coverage from in 2024.
Now, here we are in November 2024, and perhap Elon is somewhat distracted turning up to the White House with his kitchen sink, with his big new job for Trump.
But he hasn’t launched all his satellites yet. He doesn’t even have Federal Communications Commission approval for the service. His direct-to-cellphone service isn’t yet commercially available anywhere in the world. Best case scenario, it will launch in NZ in late summer 2025.
Satellite phones have been around for a surprisingly long time. In fact, they predate networks of cell towers. The world’s first commercial satellite, Telstar 1, launched in 1962. US Vice-President Lyndon B Johnson took the first call routed through that satellite. “You’re coming through nicely,” he told the tech boss at the other end.
(Telstar was undone by another new technology. The day before the launch, the US had conducted a high-altitude nuclear weapons test; radiation from the blast damaged Telstar’s fragile transistors.)
I remember journalists filing their newspaper stories by satellite phone as the clock ticked over to January 1, 2000, and the overloaded cellphone network melted down. That’s a quarter century ago, now.
I remember making a call from a satellite phone on a beach on the Solomon Islands’ remote Weathercoast in 2003, with young militia armed with rusty WWII-era rifles standing and watching, as we tried to track down the warlord Harold Keke.
Satellite internet sounds, well, space age. But it too has its challenges. I lived on Rarotonga during Covid, before the island was connected to the world up by a 3600km undersea cable. That island’s Vodafone telco relied on slow satellite internet from Luxembourg-headquartered SES. When it was cloudy, the internet dropped out. When it rained, the internet dropped out. When the All Blacks were playing, the internet dropped out.
Of course, Starlink direct-to-cell is a big technological step on from Telstar or the SES constellation – but only if it works. Right now, it doesn’t.
So Paris and One NZ are having to tough it out, promising this morning that they’ll “vigorously defend” the Commerce Commission charges.
They have to, they’ve invested heavily in their marketing campaign for this service. Just this weekend, One NZ is flying a group of senior Kiwi business journalists to California to watch SpaceX launch rockets from the Vandenberg Space Force Base,  containing direct-to-cell satellites. 
If any CEO is up for the stoush, it’s probably Paris. He’s loud, he’s brash, he’s a bit brazen. 
This is the same Paris who had to apologise for publicly describing referee decisions against his beloved Warriors as “cheating of the highest order”. And issued a three-word reply to a customer who complained about the company’s use of te reo Māori in its communications: “Haere rā Catherine.”
So yes, One NZ will push pack against the prosecution. It will argue that it included all the necessary caveats about “line of sight” and text-messaging in the fine print.
But here’s where the Commerce Commission is right to be unhappy: customers were told they’d have a service this year that they don’t have, and won’t have. They thought they could go off and climb some remote mountain, far from the nearest tower, safe in the assurance that they’d have phone coverage.
It’s not yet available for sale, so nobody’s yet paid for that service – but they may well have made plans for it. A logistics company that provides phones to its truckies, hypothetically, might well hold off signing a million-dollar contract with Spark or 2Degrees in the expectation of switching to the new One NZ service.
The commission’s deputy chair, Anne Callinan, says One NZ’s headline representations made during the campaign could be misleading and distort competition in the telecommunications market. A judge at Auckland District Court will decide.