Shares in BT (LON:BT.A) rose on Thursday after a UK government minister reportedly played down speculation that its fixed-line network arm could be hived off.
The stock gained 4.8p or more than 1% to 424.3p after digital economy minister Ed Vaizey said he was sceptical about splitting Openreach from BT.
"I think full separation would be an enormous undertaking, incredibly time-consuming and have lots of potential to backfire," the Financial Times quoted him as saying.
BT rivals such as Sky, TalkTalk and Vodafone are likely to be disappointed by the comments, having argued that Openreach should be hived off to boost competition.
They say separation of BT's fixed line network would remove any potential conflict of interest between that and the formerly state-owned company's retail internet business.
Vaizey was speaking ahead of a deadline next Thursday for submissions to regulator Ofcom's review of digital communications in the UK.
The review, announced in March, is examining competition, investment, innovation and availability of all digital communications, including broadband, mobile, landline and bundled services.
Ofcom's last strategic review between 2003 and 2005 led to the creation of Openreach, through which BT is required to provide access to competing providers on equal terms.
The watchdog says the move has benefited consumers, but some questions remain, such as whether current regulation is sufficient to remove any incentive that BT may have to discriminate against rivals.
In the latest review, it has pledged to consider options including keeping the status quo, increasing controls on BT, separating Openreach from BT or deregulating and promoting competition between networks.
Last week, BT chief executive Gavin Patterson defended the current arrangements, saying BT has invested £10.5bn of capital into Openreach in the past 10 years and last year invested more than ever before.
He said: "We acknowledge there is more to do on customer service, but Openreach is exceeding all 60 service targets set by Ofcom and breaking up BT is not the answer.
"It would lead to huge uncertainty and fundamentally undermine the case for future investment, dragging the UK backwards at the very time it needs important investment in its infrastructure."
Shares in Sky (LON:SKY) rose 11p to 1055pm in mid-morning trading in London, while TalkTalk's (LON:TALK) stock fell 3.3p to 311.1p and Vodafone (LON:VOD) dropped 0.43p to 208.02p.