Indicator
Happy path
Unhappy path Sub-10%, stalled
Take-up rate (% of premises passed)
25-30%+ and rising
Capital structure Cash generation
Viewpoint: Altnet consolidation strengthens UK fibre competition This UK Altnet consolidation wave is not a failure of competition policy. It is the natural correction after over-investment by too many subscale operators chasing the same premises. The UK had over 100 Altnets at the peak. That number was never sustainable. What matters is whether consolidation produces two or three credible national competitors to Openreach, or a patchwork of regional monopolies. Strategic or sponsor exit at market metrics (e.g. Nexfibre/Substantial Group) Freedom Fibre/Truespeed (unlevered, consolidating) Low debt-to-equity ratio or unlevered Recurring revenue covers opex and debt service
On current evidence, the former looks more likely. Nexfibre’s target of 8 million premises puts it within range of a genuine national wholesale alternative. CityFibre (which acquired Lit Fibre from Newlight Partners in 2024) is building towards similar scale. In our experience advising on telecoms transactions, the regulatory due diligence workload is front-loaded: the CMA overlap analysis and NSI assessment need to run in parallel with commercial due diligence, not after it. The transactions practice at Bratby Law advises on this intersection of telecoms regulation and deal execution. Predominantly debt-funded, high gearing Revenue falls short of debt service obligations Lender-driven exit, equity written down (e.g. Gigaclear, G.Network) G.Network (300m debt, 6% take-up, administration)
Investor outcome
Q1 2026 examples
consolidate from a position of strength. Second, a take-up trajectory that credibly reaches the 25-30% threshold where recurring revenue covers operating costs and debt service. Nexfibre’s acquisition of Substantial Group is premised on Netomnia’s existing customer base plus the wholesale commitment from Virgin Media O2, which together underwrite the revenue needed to justify the £2bn price. PE investors evaluating UK Altnet portfolio exits should assess which path each asset is on before the market decides for them.
https://bratby.law/uk-altnet-consolidation-fibre-ma-wave-2026/
Volume 48 No.2 MAY 2026
59
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