Communications regulator Ofcom has sent a ‘Statement of Objections' to BT outlining how it may have abused its position in the telecoms market by setting uncompetitive pricing levels.
Ofcom received two complaints alleging that BT may have been engaged in a "margin squeeze" in the market for wholesale end-to-end calls between July 2008 and April 2009.
The complaints suggest BT's pricing may have been below cost and aimed at eliminating or weakening competition.
"BT refutes, in the strongest terms, any allegation that we applied incorrect pricing to our wholesale calls product between July 2008 and April 2009," said a BT spokesperson.
"We will, of course, participate fully in the Ofcom investigation over the coming months and defend our pricing vigorously."
BT has until January to make written and oral representations in response to the Statement of Objections, and if found guilty could face a fine of up to 10 per cent of turnover for the period being investigated.
THUS plc and Gamma Telecom lodged their complaints in June 2008. Cable & Wireless has also confirmed support for the investigation.
"Cable & Wireless Worldwide believes that BT's pricing of its wholesale end-to-end voice calls product for the reseller market during the period from July 2008 to April 2009 was anti-competitive and welcomes this initial step by Ofcom," said a Cable & Wireless spokesperson.
"We look forward to Ofcom concluding the investigation."