BT Group plc (BT) stock extended losses Monday after British regulator Ofcom slapped another fine on the communications provider for the shoddy treatment of business broadband customers dealing with its Openreach division, the national monopoly in broadband infrastructure.
An Ofcom investigation found that BT had 'inadequately and retrospectively' made use of a contractual loophole, called 'deemed consent', that enabled it to halt work and push back the agreed delivery dates for providing business ethernet services under certain circumstances with impunity.
Ofcom fined BT £42 million ($52.5 million) and said that it must provide compensation to affected customers. BT has estimated the cost of this compensation at around £300 million.
BT shares slid by 1.6% after the opening bell, to change hands at 318.9 pence, outpacing the 0.61% loss for the Stoxx Europe 600 Telecommunications index.
The latest censure from Ofcom comes just days after the regulator made a proposal to introduce mandatory compensation for service outages and sloppy customer care.
Ofcom said that it is proposing measures that will require providers to pay automatic compensation to customers when internet and landline phones are not fixed quickly enough or if an engineer misses a scheduled appointment.
The measures proposed by Ofcom would cost the industry around £185 million per year, according to its Friday statement and, if implemented, will add to a plethora of regulatory and operational challenges currently facing BT.
Both moves come less than a month after BT reached an agreement with Ofcom over the treatment of Openreach, which saw BT agree to separate the division from the group structure.