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Adkins qualified his point. “Of course, timing is everything. Get a first mover advantage and potentially it sticks. They retain custom and word-of-mouth helps people. Customers tell you this is a good service and it’s cheaper. In a lot of cases this has worked. And many have competed successfully with Openreach.” The fact remains, however, that Openreach never quite took their eyes off the ball. Our senior MSO executive told Broadband, “There has been a certain amount of revisionism on the part of the altnets in recent years; people are having to defend business plans made in 2016 which haven’t quite come to fruition. There was a belief held by altnets that if they built it, Openreach or Virgin Media wouldn’t come. Their thesis has been proven not to be correct.” Openreach have certainly made serious inroads into parts altnets had hoped they wouldn’t reach, particularly in the last two years. What changed? What is considered economically viable changes over time, especially in times of huge economic uncertainty. Technical innovation has advanced; costs to build and deploy have reduced considerably so what wasn’t economic then may well be now.
advertising, regardless of whether it was FTTH (Fibre to the Home) or FTTC (Fibre to the Cabinet). Even CityFibre’s noble attempt nearly a decade later to overturn this in the High Court failed, since the view was that the public was too stupid to really pay any attention to technical terminology, that it was ‘rarely noticed in ads and, where it was, was seen as a buzzword for faster broadband’. Staggering isn’t it. It makes you wonder if the confusion was even affecting decision makers at the ASA. Incredibly, it took till 2023 for Ofcom to be spurred into action, six years after the High Court decision (and a full 15 years’ worth of misinformation later), bringing in a ruling that stated ‘Broadband firms must now tell consumers about the network that underpins their broadband service and must only use terms that are clear and unambiguous,’ but it was rather too little too late. That hasn’t helped altnets with their subscriber rate either, not if potential customers think they already have full-fibre broadband piped into their homes. Why change? What was intended as a surefire way to grow the sector led to such confusion it actually arrested its development, but you wouldn’t know that from the ASA website, which is busy congratulating itself on a job well done. Branding and differentiation Beyond homes passed, an existential problem is plaguing small companies, one of recognition. Coloured vans and flyers aside, competing with a brand as recognisable as BT Openreach or Virgin Media, both of whom offer sophisticated content and mobile packages as well as broadband is very challenging. The only differentiators are price, service and speed. Endlessly competing on price is a race to the bottom and serves nobody. Service is an option, but small operators can’t provide the call centres, loyalty incentives and 24-hour helplines to the same extent; that said, their customer service will be much more personalised. Ogi and B4RN are notable in the sector for going the extra mile for their customers and reminding the industry what they’re doing in this area too, another important component. Educating the industry is vital; we are all learning on the job after all. Speed is an abstract concept to Joe Public and only comparable to what it is not; we all know what slow speed is. But most of us can’t tell the difference between 3Gbps (Community Fibre) and
A failure to plan is a plan to fail In rural areas, the opportunity for experienced, well connected, local engineers who knew the landscape like the back of their hands must have been irresistible. Long-term planning when technology is moving so fast is difficult, and most business plans contain an element of assumption, and analysts I spoke to agreed certain assumptions were likely made among altnets regarding subscriber demand and retention, market competition and potential market share. Who can actually see round corners after all? Depending on whom you speak to, Openreach were always intent on building out to rural areas, or instead were compelled to up their game latterly by sheer force of competition. Whatever their position, their rapid progress recently, giving subscribers more than one option in remote areas has impacted market conditions and rattled investors and altnets alike. Market conditions also changed, and the last 15 years has seen more than its fair share of tumultuous world events: a global recession, Brexit, COVID, the first Trump administration, five successive Conservative Prime Ministers in seven years, one of whom crashed the economy in her 49-day tenure, war in Europe, another in the Middle East, and now another Trump administration. It’s been a busy time. Executing a business plan of any nature amid all this was always going to be challenging, never mind concerns closer to home. Ian Adkins, partner at global consultancy and research firm Analysys Mason warned that altnets had underestimated the threat posed by Openreach’s aggressive expansion. “If a business plan is based on assuming that Openreach isn’t going to get there, it’s probably misjudged.” James Barford agreed. “There are exceptions, special cases of course, but it’s likely the altnets hoped that if they built out in an area, Openreach wouldn’t build out.” This makes sense, particularly in rural areas; by the mid 2010s residents all over the UK were losing patience waiting for the incumbents to reach them, resulting in businesses germinating at kitchen tables and residents getting the job done themselves. Necessity is the mother of invention, after all. This is the folklore circulating around the industry, which Broadband Journal has reported on at length.
Law of unintended consequences
The incumbents are partially responsible for the slow take up of subscribers among altnets but there are other elements at play. The MSO executive I spoke to felt that an education process needed to take place, to motivate customers to see the benefit of a full-fibre connection, while James Barford felt that “The altnets thought consumers would flock to them, because full-fibre is a much better service than part-fibre. The issue is that demand for very fast speeds is actually quite weak. Part-fibre provides the majority of people’s requirements pretty well.” He has a point. Few of us are mining bitcoin; even fewer are editing feature films in our spare time. Most of us, like your writer, are joining Teams calls, sending emails and relaxing with Netflix and WhatsApp of an evening. Part-fibre does the job for such low- octane pursuits. Not helping matters is ongoing confusion about what constitutes full- fibre connectivity in the minds of the public, further to the ASA’s (Advertising Standards Authority) bizarre decision from around 2008 onwards to allow the term ‘fibre’ to be applied liberally in broadband
MARCH 2025 Volume 47 No.1
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