Ofcom censures BT pricing policy

BT infringed competition law by squeezing rivals through its wholesale pricing of phone calls, according to Ofcom. The telecoms watchdog said BT may have engaged in a "margin squeeze" in 2008 and 2009, by setting the prices charged to other providers for its wholesale calls product at a level that would not have allowed rivals to cover their costs. Its statement follows a two-year investigation after complaints from BT's rivals Thus – now part of Cable & Wireless Worldwide – and Gamma Telecom.

BT said it strongly refuted the allegations in Ofcom's statement of objections, which date back to between July 2008 and April 2009. It now has 12 weeks to respond before Ofcom's final ruling.

BT's wholesale calls product is used by other communications providers to offer calls at a retail level to consumer and businesses.