"They are willing to do this because every home has 10+ services on offer and switching is trivial."
How can you say that when so much of the rural U.K. is without any broadband? When the rest of the small community that has the/a home of a top dog of BT? only gets broadband when they notice he's the only one who has it? When a tax makes it particularly expensive to get the feeder line out to a community?
That has more to do with the economics of running cable to the middle of nowhere than it does competition. (BT are not the only people who can build broadband infrastructure and the fact that no cable operator has bothered to run a line out there either should be a good indication that it's not viable.)
If you want easy access to the countryside and all of the nice things it offers then you can't be surprised to find out that there are some drawbacks to making that choice. It's unreasonable to expect people who live in high density environments to subsidize your Internet access.
But that has nothing to do with competition - once BT does enable the exchange all the competing broadband services will be available. You won't be at the mercy of them being able to charge any price they like just because they built the infrastructure, and in a remote location that's even more important than it is in London where building a second competing telecoms network might be profitable.
How can you say that when so much of the rural U.K. is without any broadband? When the rest of the small community that has the/a home of a top dog of BT? only gets broadband when they notice he's the only one who has it? When a tax makes it particularly expensive to get the feeder line out to a community?