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

Ofcom said the telecoms giant’s network arm failed to give a rival company the same information as its own bidding team during the tender process for a public sector contract.

Under the watchdog’s rules, BT’s network division must treat all wholesale customers equally, including BT’s own customer-facing business.

The penalty is the result of an investigation into a complaint made to Ofcom by telecoms company Eir. 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.

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.

Between April 2017 and March 2018, BT and Eir both bid for the ‘Northern Ireland public sector shared network’ (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.

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.

In June 2018, BT’s bid team won the contract.

Ofcom’s investigation found that BT’s network arm broke the 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.

It also 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 BT, Ofcom added.

As a result of these findings, Ofcom has imposed a penalty of £6,300,000 on BT. The penalty incorporates a 30% reduction to reflect BT’s agreement to settle Ofcom’s investigation by admitting full liability. Openreach and BT have cooperated with our investigation.

Gaucho Rasmussen, Ofcom’s Director of Enforcement, 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.”

A spokesman for BT Group said: “We regret the level of service we provided to this communications provider during this tender process in Northern Ireland.

“We’ve co-operated with and accepted Ofcom’s findings and have already put measures in place to prevent this happening again.

“We also continue to review how we can improve our service.

“Ofcom recognises that these errors weren’t deliberate and that we took a number of steps to comply with the regulatory obligations.

“Based on Ofcom’s decision, we don’t believe this impacted the tender outcome.

“Our focus remains on constantly improving our levels of service to customers as we make significant investments in 5G and full-fibre networks across the UK.”

Philip O’Meara, Regional Director eir Business Northern Ireland, said: “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 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.”