BT break-up back under the spotlight

Brief: Ofcom's strategic review of the UK telecoms market will consider if its dominant operator should be sliced in two

Ofcom is considering whether the break-up of BT would be in the interests of Britain's communications sector.

The regulator released details of phase one of its strategic review of the UK telecommunications market on Wednesday. This review will address issues such as competition in the marketplace, regulation and whether it should be reduced, the path towards faster broadband services, and whether there is a case for splitting BT's network management from its retail operations.

BT has consistently fought against this idea in the past but many of its rivals claim that the current situation limits competition, because BT has too much control over the telecoms market. The failure of local-loop unbundling, which allows other operators to install their kit in BT's local exchanges, is often cited as evidence that more radical action is needed.

Oftel, which used to regulate the telecommunications market, has always resisted these calls. But in 2002 Lord Currie, now head of Ofcom, wrote a report that said "careful consideration" should be given to separating BT, which led to speculation that Ofcom could take this drastic step.

Full details of the Ofcom review can be seen on its Web site.