The spot, "Smart mobile swap shop" was one of a trio created for the brand by WCRS and starring Tom Hardy.
The ad, which features a downbeaten-looking Hardy walking along a coastal path, promotes Sky Mobile’s early upgrade feature.
A voiceover reads: "Things can look tired a year on from when you bought them. Like your phone. Once it was the hot, new model. Not anymore. That's when you realise you've still got a year on your contract. That's a long way to go.
"But new Sky Mobile lets you swap your old phone for the latest one every 12 months free of charge. So, say hello to a shiny new phone every year with Sky Mobile. Sky. Believe in better."
Sky said the offer meant that customers who bought a phone under a 24-month repayment term could choose to trade in their phone for a new one after their 12th monthly payment, and that as long as the phone was in full working order and no market value adjustment applied, the price it paid the customer would pay off the balance of the customer’s loan.
But the deal requires customers to take out a new 24-month repayment plan for their new phone – and the ASA agreed with two complainants who said the claim "free of charge" was misleading.
The watchdog said that the on-screen text specifying the terms of the deal was neither prominent enough, nor featured clear enough phrasing, and ruled that the ad breached the BCAP Code rules on misleading advertising, qualification and "free" claims.
Sky said it had no plans for the ad, which appeared in May, to be used again.