The telecoms regulator has ordered BT to open up its Openreach network to competitors after concluding that the UK must "do better" at rolling out superfast broadband and 4G mobile.
Openreach provides the final mile of network connection into consumers' homes, and Ofcom wants the network opened to allow rivals to build their own advanced fibre networks connected directly to homes and offices.
In its Strategic Review of Digital Communications, Ofcom said Openreach restricted competition as it "still has an incentive to make decisions in the interests of BT, rather than BT's competitors".
The regulator has outlined a new strategy to promote large-scale roll-out of new ultrafast broadband networks, based on cable and fibre lines, as an alternative to the partly copper-based technologies being planned by BT.
But the plan means Openreach will need to be more forthcoming with rivals who want to build their own networks.
The regulator also outlined plans to introduce tougher rules on faults, repairs and installations, transparent information on service quality and automatic compensation for consumers when things go wrong.
It said it would work with the government to deliver a new universal right to fast, affordable broadband for every household and business in the UK and also intends to introduce new obligations in future spectrum licences to improve rural mobile coverage.
Ofcom chief executive Sharon White said: "People across the UK today need affordable, reliable phone and broadband services. Coverage and quality are improving, but not fast enough to meet the growing expectations of consumers and businesses.
"So today we've announced fundamental reform of the telecoms market - more competition, a new structure for Openreach, tougher performance targets, and a range of measures to boost service quality.
"Together, this means a better deal for telecoms users, which will improve the services and networks that underpin how we live and work."