Telecoms operator BT(LON:BT.A) has been hit with a record breaking fine from Ofcom for a “serious breach” of rules.
Investigated following a complaint from Vodaphone (LON:VOD), Ofcom found that BT had misused the terms of its contracts to cut any compensation payments for the delays in connecting high-speed business lines to other telecoms providers.
The regulator fined the telecoms operater £42 million, the largest fine since Vodaphone was fined £4.6 million last year.
The company will also have to pay £300m in compensation to its rivals within 12 months.
“These high-speed lines are a vital part of this country’s digital backbone. Millions of people rely on BT’s network for the phone and broadband services they use every day.” said Gaucho Rasmussen, Ofcom’s Investigations Director.
“We found BT broke our rules by failing to pay other telecoms companies proper compensation when these services were not provided on time.
“The size of our fine reflects how important these rules are to protect competition and, ultimately, consumers and businesses.
“Our message is clear – we will not tolerate this sort of behaviour.”
A spokesman for Vodafone said: “We hope this ruling will encourage BT Openreach to finally drop the unacceptable practices it has used to avoid paying compensation for late delivery of fixed fibre lines, which have impacted businesses across the country as well as our own 4G roll-out.”
Gavin Patterson, BT’s Chief executive said: “The investigation … revealed we fell short of the high standards we expect in serving our communications provider customers. We take this issue very seriously and we have put in place measures, controls and people to prevent it happening again. My management team and I are determined that BT applies the highest standards when serving our customers.”
The fine from Ofcom comes after a bad week for BT after Ofcom fined subsidiary Plusnet £880,000 for continuing to charge more than 1,000 customers over £500,000 after they cancelled their accounts.
Shares for the telecoms company fell 1.5p percent in morning trading.