Matthew Howett, an analyst at Assembly, said a merger of fixed line and a mobile firm was more likely to be approved by competition regulators than a merger of two mobile firms.
Internet use could be rationed to prioritise health services and online lessons
Labour's free broadband plan sparks industry fears
Analysts warned that state control of Openreach could bankrupt rival cable providers such as Virgin Media, whose cable network covers half the UK, as well as TalkTalk and smaller challengers.
“What would the poin of their existence be?” said Matthew Howett, an analyst at Assembly. “They would fall away overnight. It would add to the lunacy.”
BT Openreach: Labour's British Broadband plan and what it could mean for you
Some commentators have argued that Openreach needs a shake-up regardless. Customer satisfaction is low and there have been long delays launching faster broadband in the UK. Only around 10pc of the UK has access to full-fibre despite years of promises.
Matthew Howett, the principal analyst at Assembly Research, pointed to a similar approach in Australia which has caused delays for customers.
“Only one other country in the world has come close to going down this route, and for a good reason – it’s hard, expensive and fraught with difficulty,” he said. “Australia’s NNB is years late, massively over budget and offering speeds and technology a fraction of the original political intention.”
Virgin switches on 'gigabit' network to meet Boris Johnson broadband demands
Matthew Howett, an analyst at Assembly, said the Government's new pledge “will play well into Virgin's hands given their mix of technologies”.
He added: “The only way Boris’s 2025 target for nationwide full fibre coverage had the slimest chance of success was for it to be fudged to include Virgin’s network.”