Telecoms watchdog Oftel is to investigate BT's use of indirect channels following complaints that the telco breached its licence by offering a contract-winning discount via an indirect sales partner.
Oftel has issued a provisional order on BT for breaking discount protocol. It said that the telco effectively offered a discount to IBM via its indirect sales partner RHM.
Virtual data network service provider Vanco had complained to Oftel that BT undercut it when it was closing a multimillion-pound, multi-year deal for data network services with IBM.
Vanco said its bid was accepted by IBM and that BT was informed that an alternative supplier had been found, but that IBM then reverted to BT after it received an offer through RHM.
"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," said David Edmonds, director general of telecommunications at Oftel, in a statement.
BT has been ordered to withdraw the arrangement or to make it available in full to all other third parties and service providers within three days.
Edmonds said the regulator would now scrutinise the multi-channel approach employed by BT, as well as the discounts it offers. Oftel will also look at whether the telco has adopted such tactics before, he added.
BT, which has denied breaking the rules, said that indirect sales partner RHM could not be obliged to publish the terms on which it deals with IBM, and that BT is entitled to make commission payments to indirect channels.
A Vanco spokesman said the company had won £50m worth of business over the last three months, adding clients such as Avis Car Rental and the Computer Science Corporation. "We are so competitive with BT it has to resort to this type activity to compete with us," he said.
Allen Timpani, Vanco's chief executive, added: "We must look to Oftel to keep the playing field level."
A statement issued by BT claimed not to have offered any discount to IBM. "BT does not believe that Oftel's findings are correct and that BT has breached its licence," it said.
"BT will be examining this order carefully and considering its options but it does believe there is no breach."
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