You've created an environment where there is a single large incumbent and the ability and incentive for anyone else to piggyback on their existing infrastructure.

Now suppose that anyone could run an ISP out of their house. They wire up a few of their neighbors and then make a single long-distance run to one of many backhaul providers, none of which has a dominant market position like BT. The backhaul providers connect to their customers and each other in telco hotels, but they're smaller and more numerous because each of the largest providers has their own, so the city has three or four instead of one.

Meanwhile even if you have a BT, organizational independence in itself is better than nothing.

Are there western countries with no incumbent telecom provider?

It is a fine concept but you'd have to actually ban infrastructure sharing between ISPs and be building a completely Greenfield network. Quite theoretical. I'm aware of former eastern bloc countries that have dynamics somewhat reminiscent of what you describe though.

It's not that you have to prohibit it, it's that you have to somehow break their existing monopoly if it already exists, and it's easy to choose rules that don't actually break it but instead cause it to be a de facto utility again. So for example, if the incumbent has a monopoly on transit or interconnection, you have a problem because they could just charge prohibitive rates and bankrupt all their competitors. And prohibitive rates are same thing as banning them from using it, aren't they? It's what happens by default. But then the competitors can't get off the ground because the incumbent has a vertically integrated monopoly.

You could require them to provide those services for their competitors at regulated rates, but then you're not actually breaking that monopoly, you're just regulating it while cementing it in place.

If you have an existing monopolist then first you have to thoroughly break them up, not just mitigate the continued existence of the monopoly.