BT fined £6.3m for breaking Ofcom rules in Northern Ireland tender

2 min read Networks & Network Services
Ofcom has today fined BT £6.3m after its network division failed to give a rival company the same information as BT’s own bid team during the tender for a public sector telecoms contract in Northern Ireland in 2017/18.

The penalty of £6,300,000 is the result of an investigation into a complaint made to Ofcom by telecoms company Eir. It incorporates a 30 per cent reduction to reflect BT’s agreement to settle Ofcom’s investigation by admitting full liability.

The complaint related to BT’s conduct during the tender for a high-value contract to provide essential telecoms services to public sector organisations in Northern Ireland. Ofcom said Openreach and BT cooperated with its investigation.

Under Ofcom rules, BT’s network arm must treat all its wholesale customers equally. Most telecoms companies – including BT’s own customer-facing business – rely on access to BT’s network to provide their services.

Ofcom says its rules are designed to address competition problems that might otherwise arise from BT’s ‘significant market power’ and to ensure a level playing field, on which other providers can compete with BT.

Gaucho Rasmussen, director of enforcement, Ofcom, said, “BT’s network arm broke our rules by failing to treat a rival company and BT’s own bid team equally during the tender for a major public sector contract in Northern Ireland. Our fine reflects how important these rules are, and how seriously we take compliance.”

Philip O’Meara, regional director at Eir, added, “Eir Business Northern Ireland welcomes today’s decision by Ofcom that BT unduly discriminated against Eir in tendering for the Northern Ireland public sector shared network [NIPSSN] contract. The size of the fine imposed by Ofcom on BT illustrates the gravity of BT's behaviour. We firmly believe that had BT complied with its regulatory obligations, we would have retained the NIPSSN contract. We are considering our options in light of today's decision and BT's admission of liability. Eir Business Northern Ireland is keenly committed to its customers and to ensuring a fair and competitive market place for telecoms services.”

Between April 2017 and March 2018, BT and Eir both bid for the NIPSSN contract. This was to provide shared data transfer services and calls to over 150 public sector organisations in Northern Ireland across 2000 sites, including schools, the police, government departments, local councils and other public bodies.

The part of BT’s network arm that provided support to Eir’s bid sat within ‘BT Northern Ireland Networks’ (BTNIN). Staff from both Openreach and BTNIN provided support to BT’s bid. In June 2018, BT’s bid team won the contract.

One of the possible solutions that could be used by the bidders for the contract was BT’s Fibre to the Premises on Demand (FOD) product. Ofcom’s investigation has found that BT’s network arm broke our rules during this tender process, by failing to provide Eir with the same information about this FOD product – including its suitability and cost for delivering the relevant services – as it did to BT’s bid team.

BT’s network arm provided a message to Eir that FOD was not a suitable solution for its bid and that it had delivery limitations. In contrast, the BT bid team was provided information that suggested FOD was suitable for major multi-site network upgrade projects (such as NIPSSN) and could be delivered at such a scale.

BT did not provide the same information on pricing and costs of the FOD product, and it did not provide certain information to Eir on the same timescales and by the same processes as it did for its own big team.

Ofcom has said it acknowledges that, during the tender, BT did implement compliance processes to address the risk of not treating the two bidders equally. In addition, it does not believe that the breaches were deliberate.

This article has been edited after publication to include comment from Eir.