I remember conversations about this 15+ years ago. Opinion among my peers seemed to be that it was in order to prevent British Telecom monopolising the comms infrastructure.
(Note to non-UKians: BT do, in fact, control most of the ADSL provision in the country and are still a defacto monopoly.)
(As above, this is actually the case. )
What people forget is the list of prerequisite conditions for good market competition: plenty of buyers and sellers, good information about products, easy comparison, low transaction and switching costs, low cost of entry.
Fake markets for denationalised industries (I've seen this called "playing at shops") do not generally work very well because they're missing one or more of those attributes.