BT gets record fine over late network installations for rivals

[LONDON] BT Group Plc will pay about £342 million (S$597.16 million) in fines and compensation after the former phone monopoly failed to adequately reimburse other providers for delays installing high-speed broadband cables.

The UK communications regulator Ofcom ordered BT to pay a record £42 million fine for reducing compensation to other companies that rely on its network when it didn't deliver business ethernet services on time, according to a statement late Sunday. BT will also pay about £300 million as compensation to the other carriers, though the amount may still change.

The rebuke is another blow to BT over its network division Openreach, which the company agreed to legally separate this month, as the regulator seeks greater independence and more spending on full-fiber broadband. The penalty is the largest issued by the regulator, topping a £3.7 million fine of Vodafone last year for poor customer service arising from an overhaul of its billing system.

BT chief executive officer Gavin Patterson and Clive Selley, the CEO of Openreach, apologised for the issue in a statement and said the company has improved the process to deliver high-speed connections to ensure the same mistakes aren't repeated.

The company is treating the regulatory fine and compensation payments as a specific-item charge and said its business outlook for the next two years won't be affected.

The Ofcom investigation found that BT had misused the terms of its contracts from January 2013 to December 2014. Ofcom opened a probe into the issue in November 2015 after complaints from Vodafone Group Plc. BT will also have to pay a £300,000 penalty for failing to provide information to Ofcom.

BLOOMBERG