BT has been ordered to separate from its network provider Openreach – in a move aimed at improving broadband and phone services.

The split was ordered by Ofcom, the government's telecommunications watchdog, after BT failed to offer voluntary proposals that addressed competition concerns.

Openreach is the division of BT Group that develops and maintains the UK's main telecoms network used by providers such as Sky, TalkTalk, Vodafone and BT's retail business.

Ofcom said it was pressing ahead with its plans to improve broadband and telephone services, pursuing better service quality and encouraging greater investment in networks.

    See also: Rural areas 'left behind' on broadband

Creating a more independent Openreach – which works in the interest of all providers, not just BT – Was an important part of achieving this, said Ofcom.

It added: "We are disappointed that BT has not yet come forward with proposals that meet our competition concerns.

"Some progress has been made, but this has not been enough, and action is required now to deliver better outcomes for phone and broadband users."

Competition concerns

Ofcom said that Openreach should become a distinct company within the BT group, and that BT had not voluntarily addressed competition concerns laid out in July.

Competitors have long blamed the close relationship between BT and Openreach for hampering improvements to the UK's broadband services, especially in rural areas.

But it remains to be seen whether rural broadband speeds will improve as a result of any split.

Country Land and Business Association senior business adviser Charles Trotman said: "Any formal break between BT and Openreach must not lose sight of the goal to deliver broadband to rural areas.

"Ofcom must make it clear that the conditions of the separation include guarantees for future investment to further support rural digital connectivity."

Similarly cautious

While seeing the potential advantages of BT and Openreach being separated, the Countryside Alliance was similarly cautious.

The government and digital infrastructure providers must not to be distracted from the key task of ensuring rural communities were not left behind, it said.

Countryside Alliance head of policy Sarah Lee said: "The Countryside Alliance is pro-competition and believes that end-to-end competition should be maintained where it is effective and sustainable.

"This must include delivering connectivity to the countryside and those hard to reach areas.

"The proposal to separate BT and Openreach could lead to greater competition, but it is going to take several years to 'separate' BT and Openreach.

Poor service

Ms Lee said this must not be allowed to distract from the rollout of broadband to those communities which were receiving a poor level of service.

"It is vital that at the end of this we end up with a competitive market that delivers the modern digital services and the infrastructure Britain desperately needs.

"Consumers must be placed at the heart of this process."

BT insisted that it had submitted "fair and sustainable" proposals to Ofcom and would continue negotiating with the regulator.