UK regulator to examine separation of BT network unit

LONDON, July 16 (Reuters) - The British telecoms regulator said BT could be made to spin off its networks unit, which wholesales capacity to rivals like Sky (Other OTC: BSYBF - news) and TalkTalk, to boost competition in the broadband market for consumers and businesses.

Forcing BT to divest Openreach is one option being considering by Ofcom in its biggest review of the British communications market for a decade. Others include retaining the current model, and using market reviews to address any concerns around competition, and applying new rules to BT.

Ofcom said the current system, whereby BT operates Openreach as a separate unit, had delivered real choice.

But it added that although the incentive for BT to discriminate against competing providers could be limited by regulation, it could not be removed entirely.

(Reporting by Paul Sandle; editing by Kate Holton)