Thursday, January 06, 2011

UK - Regulator has accused BT of a price squeeze concerning wholesale pricing of phone calls

[reuters] Britain's telecom regulator Ofcom accused BT of infringing competition law in 2008 and 2009 by squeezing rivals through the wholesale pricing of phone calls.

BT, Britain's biggest fixed-line provider, said it rejected the accusation outright and said it would defend itself against the allegations which date back from July 2008 to April 2009.

Shares in BT dipped half a percent after the Ofcom statement which accused BT of engaging in a "margin squeeze" by setting the prices charged to other providers for its wholesale calls products at a level that would not have allowed equally efficient operators to cover their costs.

Ofcom, which examined the situation following complaints from Thus Group and Gamma Telecom, said it would wait for BT's response before deciding whether competition law had been infringed.

A BT spokeswoman said: "BT refutes, in the strongest terms, any allegation that we applied incorrect pricing to our wholesale calls product between July 2008 and April 2009."

"We will, of course, participate fully in the Ofcom investigation over the coming months and defend our pricing vigorously."

Ofcom accuses BT of breaking competition law

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