BT has called for a competition crackdown on Apple over concerns the tech giant could use its smartphone market power to squeeze out mobile networks.

The operator has raised concerns that the rise of virtual “eSims” that replace Sim cards could see smartphone makers tighten their grip on the market.

In a submission to the Competition and Markets Authority (CMA), BT said: “We also encourage the CMA to consider the risk of disintermediation in the telecoms industry with respect to eSims, which is an additional area where handset providers could exercise their strong market position.”

Physical Sim cards have long been a critical link between network operators and their customers. But the growth of eSims means BT and its rivals risk losing ground to the likes of Apple and Samsung, who are increasingly selling phones directly to consumers.

The threat is particularly acute as telecoms companies try to expand their offering beyond traditional mobile services, amid tough competition and shrinking margins.

BT, which is side-lining its brand in favour of EE, has outlined plans to start selling other products and services from fridges to insurance. It has also launched a new service and smartphone app, dubbed EE ID, in a bid to expand its customer base.

However, industry executives fear these efforts could be undermined as tech companies increasingly build a direct relationship with their customers.

Kester Mann, of industry analyst CCS Insight, said: “One of the challenges is that network provisioning starts to become more remote, therefore there’s less opportunity for operators to engage with customers, whether that’s selling new products or getting a sense check on how they’re feeling.

“It feels like it’s another part of the journey that is cutting operators out the loop a little bit, so I think that’s one of the reasons why they’ve been a little bit reluctant to embrace the eSim concept.”

In the most extreme scenario, companies such as Apple could use eSims to launch their own virtual mobile networks – similar to the likes of GiffGaff and Tesco Mobile – though analysts said this was unlikely in the near term.

eSims were not mentioned in an investigation into Apple and Google launched by the CMA last week, which focused on web browsers and smartphone app stores.

Apple introduced its first eSim iPhone in 2022 and all of its US devices are now eSim only, with a similar move expected in Europe as soon as this year.

BT is not alone in sounding the alarm over the rise of eSims. Virgin Media O2 has also raised concerns about tech giants tightening their grip on mobile markets.