I wouldn't say the competition is very tough in the Netherlands, as there are also only a few large players (each with multiple brands/subsidiaries under them). Furthermore, a couple months ago, the dutch FTC put major telecom providers under review for making alleged cartel price agreements.
On a higher level, I am certainly for a free market, but don't dismiss government regulations purely because they can 'only hinder competition'. That is a very dogmatic statement as regulations aren't always 'bad'/hindering competition. No personal offense intended, but I always find the strength of belief in a purely free market for some people to be almost the same as how other people believe in religion, very idealistic and extreme. There are a lot of subtleties and nuances to free markets. Also, is pursuing a free market a goal in itself, or a means to an end in creating a 'good society'. In the latter case, other advantages of certain regulations should be considered as well.
Lastly, regarding the issue at hand, next to economical arguments, I think a large part of getting this regulation has comes from other motivations such as valuing equality and accessibility for all etc.