1. News
March 27, 2017

BT’s Openreach fined record £42m for breaking industry rules

Telecoms giant BT will be forced to pay a £42m fine — more than 10 times the previous industry record —  for regulatory breaches.

The company must also pay £300m to rivals like TalkTalk, Sky and Vodafone for abusing the terms of its contract.

BT’s Openreach division, which owns fibre broadband and telephone cables used by telecoms providers failed to pay compensation for delays in installing lines between early 2013 and late 2014.

Over 500 service providers rely on Openreach to handle 300m telephone calls and 350m internet connections every day.

“We found BT broke our rules by failing to pay other telecoms companies proper compensation when these services were not provided on time,” Gaucho Rasmussen, investigations director at Ofcom, the UK telecoms regulator responsible for issuing the fine. “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 from Vodafone, one of the major telecoms providers dependent on Openreach, applauds Ofcom’s decision.

 “We welcome Ofcom’s decision to hold BT and BT Openreach to account.  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.  We look forward to improved quality of service from Openreach in order to deliver high speed broadband to businesses up and down the country.”

Openreach chief executive Clive Selley said the firm “apologised wholeheartedly” for the mistakes.

The penalty includes a £300,000 charge because Openreach failed to provide Ofcom with all the information it asked for during the investigation process.

“We have powers to compel companies to provide us information and it’s important that that information is provided to us both on time and in complete manner,” said Rasmussen. “We found that sometimes there were delays, sometimes information was incomplete and that obviously has an impact on how quickly we can do our job.”

BT shares slipped 1.6 percent on Monday morning after news of the hefty fine broke.

In January, the company suffered from a 37 percent profit slump after improper accounting practices were uncovered at BT Italia.

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