TORONTO — Canada no longer has a “most reliable network” after a B.C court ruled Bell Mobility (TSX:BCE) must remove all of its advertising containing such a claim in a decision that conjured up wireless deja vu.
Wednesday’s court order follows a similar injunction issued last month against Rogers Communications Inc.’s (TSX:RCI.B) own claim to be Canada’s most reliable network.
Rogers launched legal action against Bell on Dec.1, claiming the Bell ads were false and misleading in an action that came after Rogers lost its own battle against Telus over the most-reliable issue.
Rogers argued before a B.C. court that data suggesting Bell’s network is the most reliable is misleading because it was compiled before the commercial launch of its upgraded network, said John Boynton, chief marketing officer of Rogers Wireless.
“You need to build reliability over time with many customers to be able to validate,” he said. “... Bell testing on an empty network does not constitute that.”
“The claim is something Rogers has been building and measuring and reporting on for years and years,” he said. “We have vast, vast amounts of internal and external third party testing over many years over thousands of tests per city.”
Bell spokeswoman Claire Fiset said the court did not argue with Bell’s network testing that found it had the clearest reception and the fewest dropped calls, but ruled that the reliability of a new network cannot be directly compared to an older network.
“With that judgment today, it means no wireless network in Canada can make a most reliable claim in Canada right now,” she said. “So if we can’t claim it, nobody can.”
Rogers now advertises itself as “Canada’s reliable network,” after a B.C. appeal court upheld a decision to force the company to drop the word “most” from its two-year-old slogan.
Rogers also argued Bell Mobility’s claims cannot promote its network as being Canada’s largest, because it is shared with Telus Corp. (TSX:T).
“When someone is largest that’s the definitive description and only one can be largest and obviously its a shared network,” Boynton said.
Rogers also took aim at Bell’s claims that it is the “fastest,” “best,” and “most powerful network,” but the judge did not rule those claims were damaging enough to warrant immediate injunctions.
Fiset said Bell understood that the judge took issue only with the reliability claim.
“We can still claim that our network is the largest, the fastest, the best and the most powerful in Canada; the judge had no argument with those claims,” she said.
The company added in a statement that there was “no doubt that the new network is the largest and fastest, and nothing to stop us from letting Canadians know it’s the country’s best and most powerful wireless network for those very reasons.”
The court ruled in a verbal order that Bell must remove its advertising making the most-reliable claim immediately, but has not yet given a deadline.
The company said it is considering an appeal, adding that only about 10 per cent of its advertising contains the claim.
In November, a B.C. judge ordered Rogers to remove its television, radio and newspaper ads, flyers, posters and other in-store promotional material on Dec. 3, with a final deadline to remove all of the ads by Dec. 18.
Boynton said Rogers will continue legal action to prevent Bell disseminating the other four claims and will continue to monitor Bell’s advertising campaign to ensure it removes the reliable claim “as fast as humanly possible.”
“Its up to Bell to decide whether they want to continue with that advertising, given that they’re going to be facing us in court,” he said.
Telecom analyst Eamon Hoey of Hoey Associates said the court battles between Canada’s big three wireless companies shows they are focused too much on one another and not on customers, who are more concerned with their bills than advertising claims.
“It’s childish behaviour, led by children who have lost focus,” he said. “The shareholders ought to be concerned about the behaviour that they’re seeing; that rather than being focused on the customer, they’re focused on this sideshow.”
Wednesday’s ruling comes the same day as new cellphone provider Wind Mobile launched into the Canadian wireless market and reflects the cutthroat competition that is beginning to emerge as all three major companies set to face off against a new wave of wireless rivals.