Global telecoms company, BT, have been fined a whopping £42 million by regulator Ofcom, after the company unsuccessfully compensated rivals after failing to provide high-speed internet connections in time. This is the biggest fine that Ofcom have ever imposed, and will see BT having to pay around £300m in compensation to rival telecoms companies, including Sky, TalkTalk and Vodaphone.
Ofcom stated that the significance of the breach of rules that Openreach, BT’s subsidiary that deals with the UK broadband infrastructure network, carried out warranted the large fine, and that they will not tolerate this sort of behaviour. Originally, the fine was going to be £60m, but was reduced after BT admitted full liability. The focus of the Ofcom investigation was on the installation of high-speed business lines between the period of January 2013 and December 2014. The investigation came after a complaint from Vodaphone, as they rely on BT Ethernet services in order to transmit their data between mobile masts. Ofcom stated that “high speed lines are a vital part of this country’s digital backbone”, showing just how important they believe the breach is.
According to Openreach’s own statistics, just 48.8% of high speed Ethernet installations were actually completed within 30 days (although they argue that 87% of high speed installations were completed by the agreed date). Over recent months, many rivals have called for the responsibilities of Openreach to be taken away from them.
However, recent reports are suggesting that Ofcom are going even further with their regulations on the telecoms giant BT. They are once again proposing a cap on superfast broadband prices, in a bid to slash the charges to its rivals by around £100 million. Ofcom stated that the purpose of these actions is to encourage investment in ultrafast networks, as well as to help protect consumers from exceptionally high prices.
Ofcom are also looking to impose a number of performance requirements when it comes to repairs and line installations by BT, in order to improve the service. Some of these requirements include completing 90% of fault repairs within two working days of notification, up from 80%, providing an appointment for 90% of new line installations within 10 working days, and installing 95% of connections on the date agreed.
BT’s bad week didn’t end there, with Ofcom also fining their subsidiary, Plusnet, over £800,000 after they continued to charge customers who had closed their accounts. In addition to this, BT also struggled in 2016 after the accounting scandal in the Italian operation, which led to a huge drop of £8 billion in shares.
The telecoms giant have responded to the fine by stating that they are putting in measures, controls and people to prevent this type of situation from happening again, and aim to provide services of the highest of standards to their customers.
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