Telus hit with Ad Standards complaint over price claims

The industry watchdog found an ad about the "myth" of high Canadian wireless prices could mislead consumers.

A recent ad by Telus claiming Canadian wireless prices are not as bad as they are made out to be has drawn the attention of Ad Standards, which found consumers could be mislead by claims that our country’s comparatively higher rates were a “myth.”

Ad Standards is the industry’s self-regulatory body, tasked with applying the Canadian Code of Advertising Standards.

The complaint was made in response to a full-page print ad that ran in Quebec, stating that “Canadians spend less on wireless than Americans” and that it’s “a myth that Canadians pay some of the highest wireless prices in the world,” citing a PwC study showing that the average Canadian household spends 1.6% of its disposable income on wireless, compared to 2.6% in the U.S.

The complainant claimed that this is a misleading conflation of “affordability” and “pricing,” providing publicly available data that shows prices for Canada’s wireless plans were either the highest or second-highest among countries reviewed.

Ad Standards did not say which data the complainant cited, but numerous sources have compared Canadian wireless rates to those throughout the world over the years, consistently ranking them among the highest, especially when it comes to options for lower-income earners. A 2019 report from the CRTC showed that while prices for wireless had fallen in recent years, the average Canadian was actually paying more for wireless, due to the fact that they have required more data usage and faster speeds. And despite the declines here, prices in other countries have declined even more, keeping Canada among the most expensive. Data compiled by tech site The Markup this week also consistently ranked Canadian wireless plans among the most expensive when compared to those from 13 other countries.

Ad Standards found that the claims about Canadians spending less on wireless than Americans was supported by the PwC study Telus cited. However, the idea that Canadians paying some of the highest prices in the world being a “myth” is not true; the study measured affordability, not prices, and only looked at four countries, not the entire world. The review council also didn’t think that prices for wireless were lower than the rest of the world just because they spent a lower percentage of disposable income on their plans.

Ad Standards said requests for response from Telus to back up its claim went unanswered.

Because of this, Ad Standards unanimously found that “this claim strongly impacted the general impression conveyed,” contravening Clause 1(a) of the Canadian Code of Advertising Standards, which states that ads “must not contain, or directly or by implication make, inaccurate, deceptive or otherwise misleading claims, statements, illustrations or representations.”

As a self-regulatory body, Ad Standards’ decisions are non-binding. Telus did not respond to a request for comment by press time, and has not said whether the ad in question, or those with similar claims or language, are still in the market, but a Telus-owned website about wireless pricing still prominently features the claim at the top of the page (Telus has since responded to strategy’s request for comment, which can be found below).

Earlier this year, the federal government gave Telus, Bell and Rogers two years to reduce the costs of certain plans by 25%. At the time, the government also revised rules for an upcoming spectrum auction – initially planned for December but postponed to 2021 due to the pandemic – to save space for regional providers, in the hope that it will improve competition and lead to lower rates.

Update, Sept. 4: In an email, Richard Gilhooley, Telus’ manager of communications, said the company is confident that the advertisement is “fair and accurate.” He said Ad Standards was erroneous in separating the two statements in the ad and inserted its own definition of “pricing”; when read together, it is clear that affordability was deliberately being used as the context for evaluating pricing. To further support the ad’s claim, Gilhooley cited a March report from CTIA – a trade association representing wireless companies in the U.S. – aimed to compare total “value,” rather than just prices, of wireless service in different countries. According to the report’s model, Canada offered the best value among G7 countries.

Gilhooley added that Telus did not initially respond to Ad Standards because it was not aware of having been contacted by the watchdog. Telus is now waiting for its own response from Ad Standards and is “reviewing remedies against [Ad Standards] for its apparent improper process.”