British telecom regulator Ofcom said BT has been fined £42 million for breaching contracts with telecoms providers.

Ofcom said its investigation into Openreach, BT’s network arm, has found that BT cut its compensation payments for delays in connecting high-speed business lines.

BT has admitted failings, and agreed to compensate the companies affected. BT will be fined after the company reduced compensation payments to other telecoms providers for late installations.

Between January 2013 and December 2014, BT misused the terms of its contracts to reduce compensation payments owed to other telecoms providers for failing to deliver ‘Ethernet’ services on time.

Gaucho Rasmussen, Ofcom’s Investigations Director, said: “We found BT broke our rules by failing to pay other telecoms companies proper compensation when these services were not provided on time.”

BT is obliged, under Ofcom’s rules, to install Ethernet services to its wholesale customers such as Vodafone and TalkTalk, in accordance with its contracts, and to make compensation payments for late delivery. BT’s contracts require it to deliver Ethernet services within 30 working days, or pay compensation to the company affected.

Ofcom opened the investigation in November 2015 after Vodafone brought allegations to Ofcom that BT had misused its contractual terms through the late delivery of Ethernet services without Vodafone’s consent, and by failing to compensate the company for these delays.