O'Sullivan saw off two external and one other internal candidate to secure the position, said group comms director Peter Morgan, to whom he now reports.
The move follows the exit of Sandy Walkington to join the Liberal Democrats as director of general election communications (PRWeek, 21 January).
The Ofcom review will specify which areas of the telecoms industry will require more regulation as well as deregulation.
Morgan said: 'For 20 years Ofcom's predecessor Oftel and BT were involved in trench warfare. Our CEO Ben Verwaayen and Ofcom CEO Stephen Carter are trying to be more co-operative in looking at specific areas of the market.'
O'Sullivan joined BT in 2001, when as head of parliamentary affairs he led the company's lobbying on the Communications Bill. He joined BT after ten years as a senior civil servant.
At the same time, BT has given group media relations PRO Ross Cook its top day-to-day media relations role, with the title head of BT Newsroom.
He will oversee retail, wholesale, global and group media relations.
The appointments of O'Sullivan and Cook complete a fundamental programme of change in the top tier of BT's PR function over the past few months.
As well as PA chief Walkington joining the Liberal Democrats, Morgan's predecessor Robin Pauley relocated to Brussels to oversee BT's affairs in the European Union.
Former media relations chief Tim Johns left last year to join Unilever.