Oftel threatens BT for IBM discount offer

Oftel has threatened action against BT over alleged breaches in its pricing policy.

Oftel has threatened action against BT over alleged breaches in its pricing policy.

The telecoms regulator has issued a provisional order to BT requiring it to make public the discounts offered to secure a contract with a key customer, IBM. The telco, however, believes it has "done nothing wrong".

BT is accused of making an illicit offer of a discount via a third party during a period of bidding for a managed data network contract with IBM, a complaint filed by rival network supplier Vanco claimed.

As a result of the provisional order, BT must make public the discount offer or withdraw it.

David Edmonds, director general of telecommunications, said: "It appears to me that BT has, effectively, offered a discount scheme to a customer which is not transparent and has not been published, contrary to the conditions of its licence."

Allen Timpani, chief executive of Vanco, said: "BT was the incumbent supplier to IBM and said it couldn't compete. A week or two later, BT suggested IBM speak to a third party which offered a discount scheme which was not published or transparent."

"It is good news. It is the first time since 1999 that a provisional order has been issued."

A BT representative said: "We are considering the content of the order and we will respond when we have had time to digest the details. We are a compliant company and we will comply with the order if it is shown that we have done anything wrong."

BT did not believe that Oftel's findings are correct and disputed the claim that it has breached its licence, but said it would co-operate with any Oftel investigation.

"BT will be examining this order carefully and considering its options but it believes that there is no breach.  BT has not offered IBM any discount," a spokesman said. 

BT has no legal control over any offer that is made by an indirect channel partner, he added.

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