One NZ chief executive Jason Paris on his company’s hook-up with Elon Musk’s Starlink and whether it will meet a looming deadline; whether he’d be brave enough to host Musk at the service’s launch; the first anniversary of the shift from Vodafone NZ; AI; and a restructure that’s
Jason Paris: One NZ, one year on - and what’s next, from Starlink to AI
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The Commerce Commission was a sceptic , sending One NZ a “stop now” letter in July related to its “100% mobile coverage” campaign. The telco said it was phasing out that tagline anyway in favour of “Coverage like never before with SpaceX”.
Paris — who wore a polo shirt sporting both One NZ and SpaceX logos to his Herald interview (not to mention his “lucky shoes”, sporting custom Warriors decals) — is naturally still a believer. But will text via satellite happen before the end of 2024?
“The service will definitely be live this year,” Paris said. “You’ll have mobile-to-satellite text capability. It’ll just depend how much of any given hour you will be able to text. The more satellites that you have in space, the more time that you are connected.”
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Starlink’s “swarm” approach means as one satellite disappears over the horizon, another takes over — but more will have to be launched for continuous coverage.
“The ambition is that there will be no more than a minute-and-a-half intervals within any given hour where a text message can’t be sent or responded to. And that basically means we need a certain number of satellites up in the sky to make that happen [by the end of 2024].”
After a successful test message this year and ongoing launches, he sees 45 minutes of text coverage an hour, with about 15 minutes of no signal spread across the period, in 90-second lots.
That will essentially be the inverse of Lynk — the putative Starlink rival that Spark and 2degrees are partnering with — which will be able to offer only a few minutes of connectivity an hour by the end of this year. Spark and 2degrees have staged successful tests, and 2degrees has a customer trial underway in Nelson, but neither has announced a launch date.
Most people won’t even notice a sub-two-minute delay with text, Paris says.
“The big issue is when voice launches, because you don’t want call drops.”
“Our engineers, working with their engineers, we’re still on track for launching [voice and data] in 2025.
“You’re strapping cell towers on to rockets, firing them 600km into space. They then go into orbit at 27,000km/h, with another few thousand satellites. It’s pretty mind-blowing technology.
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“I reckon if the text service launches in 2024 and the voice service and the data service launches in 2025, it’s a massive thumbs up.”
Pricing has yet to be confirmed, but Paris said it’s possible satellite connectivity would be included in some plans, with no extra charges. Emergency texts (and eventually voice calls) will be free, with the capability shared with other telcos.
Satellite-to-mobile tech has already been proven in a real-life situation in NZ. Apple last year introduced an SOS via satellite text service for iPhone 14 users in multiple countries, including NZ (usable whether you’re on Spark, One NZ or 2degrees), in partnership with satellite network operator (and major Rocket Lab customer) GlobalStar. In September, two hikers stranded by rising river levels in Arthur’s Pass - a mobile blackspot - used it to hail emergency services. It could be a literal lifesaver if another Gabrielle-level cyclone hits or shores.
Roaming via satellite
“The other thing a lot of people are not aware of is that there’s a reciprocal roaming relationship with other markets where SpaceX is rolling this technology out. So, Australia, Canada, the US and Switzerland. When you travel over there with One New Zealand, you will have coverage. If you’re in the Rocky Mountains and can see the sky [a necessity for a satellite connection], you’ll have connectivity.”
He anticipates roaming via Starlink won’t cost any more than traditional roaming today.
Musk can be edgy, from some of the racially charged content he’s reposted on X to his “f*** you” comment to corporate advertisers during an on-stage interview at a New York Times-hosted event this year.
The Herald asks: ”If Musk suddenly messaged you and said ‘Great news, I’m available for the One NZ satellite-to-mobile launch event’, would you bring him down here or would you have heebie-jeebies about what he might say?”
“I’d love to get him down to Aotearoa and be a part of it,” Paris says. “We are not on world maps sometimes, right? They still leave us off it. So, how cool would it be to get him, to get him down here? He’s one of the world’s great entrepreneurs. You do get some uncertainty sometimes [with what he says]. But what we do love is his technology.”
Could Musk eat his lunch?
Beyond partnering with Starlink on satellite to mobile, One NZ has become a reseller for the business version of Starlink’s dish-based broadband service (Spark and 2degrees have also signed on to resell the service).
At the consumer end of the market, Starlink recently started advertising a $79-a-month “deprioritised data” deal, much keener pricing than its standard $149 for home users, with the price of the dish for your roof slashed to $399 (as with all plans sold directly by Starlink, it’s not clear how long it will hold that pricing).
And while our telcos see a Starlink dish on your roof as a rural option, Musk’s firm leaflet-drops in urban areas.
Is Paris worried Elon will ultimately eat One NZ’s lunch?
“No, we think it’s a complementary service,” the CEO says.
“I think Starlink broadband is phenomenal for certain parts of the market, especially when you’re in regional or rural New Zealand where you can’t get 5G or fibre.”
“We’re an active reseller of Starlink and we’d recommend it as an increasingly cost-effective option. You can get 50 megabits per second down, which is better than VDSL [the fastest form of copper] and stream Netflix to your TV, but it still doesn’t beat 5G or fibre.
“The [satellite dish on your roof-based] broadband one is interesting. I think it’s more of a watching brief. Will it ever be a replacement for 5G as a [fixed-wireless] broadband service? A possibility in the next decade. Is satellite-to-mobile going to replace 4G and 5G? No it won’t. It will be a complementary service. If people are travelling outside of the main metro areas, it just gives them certainty that they can be connected.”
‘The worst conversations’'
The Herald was told 200 roles were cut in One NZ’s restructure, which is just wrapping up (mirroring similar exercises at Spark, 2degrees and Chorus). Was that in the ballpark?
“We’ve got about three and a half thousand staff and a couple of hundred roles have left the business,” Paris replies.
“It’s certainly the worst part of my job, or anyone’s, to tell someone they’ve lost their job, because it’s a tough market out there. And it’s not just impacting them, it’s impacting their wider whānau. But we’re proud of how we help people through that situation [affected staff were given up to three months’ notice and help finding new roles] but those are the worst conversations to have.”
“You open up the Herald app and every second news article now is some kind of structural change across pretty much every industry,” Paris says.
“And we’re not immune. We’ve certainly seen the impact of the tough economic environment flow through our business where customers are struggling to pay for their expensive handsets, or customers have deferred those big IT upgrades or they’re asking us to put them on cheaper plans.
“That’s one part of it. The other part is that over the last five years we’ve dramatically simplified the business. We’re a much-higher-performing business than we were — and that means we need fewer people behind the scenes with the masking tape to keep things together.”
Now 100% locally-owned
The rebrand followed NZX-listed Infratil teaming with Canada infrastructure investment firm Brookfield to buy Vodafone’s NZ business in a 50-50 joint venture (or close to 50-50; Paris and other senior execs own a small fraction of shares). In a $1.8 billion June 2023 deal, Infratil bought out Brookfield.
At its March 5 investor day, Infratil said One NZ was on track to meet full-year ebitda guidance of $580m to $620m, or an estimated 14 per cent earnings growth.
The presentation said, “A smaller, more highly skilled workforce is emerging.”
Reduced hierarchy, simplification and centralisation of functions had enabled a “significant and ongoing rationalisation of our back office”. There were reduced call volumes and higher first-time resolution for customers. Artificial intelligence was now being scaled “to drive significant further productivity improvement”.
A big part of the One NZ presentation was devoted to the telco’s plans for introducing more AI across all facets of its business, building on efforts that have been under way for years — even if the present buzz has pushed them more to the fore. “We’ve been preparing for the moment where AI becomes less hype, more reality. And it’s just exploded over the past 12 months.
Paris said all sizes of businesses should start getting to grips with artificial intelligence, if they weren’t already, and individual staff, too, needed to take heed and start experimenting with small business-friendly AI tools from the likes of Google, and Microsoft with its Copilot push.
“AI is not going to take your role, but someone who knows AI better than you will. So you need to understand this technology.”
Rating the rebrand
Vodafone NZ (now owned by NZX-listed Infratil) used to send a reported $20m to $30m a year to its former UK parent for the privilege of using its brand.
The flipside: the costs and complications of creating a brand from scratch.
At the time, marketing expert Bodo Lang (then with the University of Auckland, now lecturing at Massey after his own relaunch, of sorts) was something of a sceptic, in part because of similarities with the name and logo of TVNZ’s 6pm news bulletin, and potential consumer confusion that involved. Not to mention legal complications; the state-owned broadcaster initially filed a notice of opposition before the matter was ultimately smoothed over behind the scenes.
“Around this time last year One NZ was in a difficult position. The brand had very low brand awareness. Certainly nothing like the brand awareness that Vodafone NZ used to enjoy,” Lang says.
“And brand awareness is very important because consumers are far less likely to buy products and services from brands that they have never heard of or do not know well.
“Fast forward one year and it appears One NZ has done a good job of establishing its brand and differentiating itself from its key competitor, Spark.
“How have they done this? This differentiation was part of the strategy when One NZ was launched. While providing telephony, internet, and technology services can be a dry, unemotional, and boring business, One NZ’s branding and some of the products and services appear class-leading.”
Additionally, as the name promises, One NZ has a strong local flavour. This could be meaningful to NZ consumers. One example is “One Good Kiwi”, their digital giving platform where users can choose how to distribute the $1.2 million that One NZ donates each year to support positive change for young people.
“Another example is their customer service. This also received a local touch with One NZ bringing most of their call centres back to New Zealand, thus creating local jobs,” Lang says. But the telco’s unionised workers, who are mostly in its helpdesk operations, are in an ongoing industrial dispute about pay and a reduction in work-from-home hours, taking some of the gloss off.
“Last but certainly not least, One NZ has also been aggressive in their product development and then telling customers about it through their advertising. They have done so in multiple ways,” Lang says.
First, they advertise fairly heavily to ensure high brand awareness and to enhance target market knowledge about its offers, Lang says.
“Second, One NZ claims to have introduced NZ’s best-priced unlimited max-speed data mobile plan, called One Plan.”
“Third, One NZ claims to have NZ’s best mobile network. This is according to a third-party provider called umlaut. While umlaut tends to be referenced in One NZ’s advertising, some consumers may not see it and simply see the bold claim of ‘NZ’s best mobile network’. This claim is attention-grabbing and meaningful for consumers.
“Collectively, these actions have helped to establish One NZ as a Kiwi brand. And this will definitely appeal to Kiwi consumers.”
$37m ‘One Wallet’ promo
One NZ is looking to build momentum with a new promo launching this morning that sees $37m in value deposited into the new “One Wallet” for customers on eligible pay-monthly plans. The money goes toward your next new phone (if it’s over $149), with the balance paid off interest-free over a 12, 24 or 36-month plan. Every One Wallet dollar is equivalent to one real-world dollar.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
