UK regulator Ofcom hit BT with a record £42 million fine for breaching contracts with telecoms providers and failing to pay the required level of compensation for delays in Ethernet installations.

Under the regulator’s rules, BT is required to pay compensation for delays outside of its contracted Ethernet installation time of 30 working days. In certain circumstances, such as when there are logistical or technical issues with the installation, the company can assume the customer agreed to an extension.

During its investigation Ofcom found BT had been misusing its extension clause to reduce the compensation it had to pay out.

Following a complaint by Vodafone in 2015 accusing BT of failing to meet its contractual compensation terms and late delivery of Ethernet services, Ofcom opened a widescale investigation into operations at the company’s soon to be spun-off Openreach operation.

Ofcom investigations director Gaucho Rasmussen said: “These high-speed lines are a vital part of this country’s digital backbone. Millions of people rely on BT’s network for the phone and broadband services they use every day.

“We found BT broke our rules by failing to pay other telecoms companies proper compensation when these services were not provided on time. The size of our fine reflects how important these rules are to protect competition and, ultimately, consumers and businesses.”

BT secured a 30 per cent reduction on the original fine by admitting full liability and agreeing to compensate all operators involved within 12 months.