The accusations center on carrier preselection (CPS), a service that allows users to change telecom supplier without having to install a new line or needing to dial a prefix to get onto the new network.
Telco Global Communications said BT had deliberately put customers off making the switch. Some customers have had their applications cancelled by BT without consent, the carrier said, while others were told that if they moved away from BT they would struggle to receive broadband services in the future.
Engin Mumcuoglu, joint managing director at the alternative carrier, accused BT of "deliberately canceling account applications" in some circumstances and cited 150 rejected applications in the past two weeks.
A BT spokesman said: "These are clearly serious allegations being investigated by Oftel (Office of Telecommunications). We will respond once they have made those allegations."
Watchdog Oftel confirmed it had received a letter last week from Telco Global Communications, but not a formal complaint. A spokeswoman said, "We've addressed the concerns laid out in that letter. So as far as we're concerned that's the end of the matter, unless they put in a formal complaint. The ball's in their court."
Dr Mumcuoglu said, "If they want us to put in a formal complaint, that's what we'll do, because it's a really serious matter."
Telco Global Communications has been operating in the United Kingdom since 1996 and claims to have 750,000 residential and small business customers.
Silicon.com's Jon Bernstein reported from London.