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Bigger players like CityFibre could acquire them as a wholesaler, or others like Netomnia will be looking to consolidate the sector as a retail player. “We think wholesale has more sustainability,” James Barford said. “The retail market’s already pretty crowded. Trying to get 40% penetration into the retail market is very hard. It’s one thing talking about a kind of stable end game, but you’ve somehow got to get there and that can be very messy and difficult and sometimes it just doesn’t succeed.” The cliché goes, if you could do it all again, would you? This is a very dedicated industry, with decades of expertise and experience, and the decades-old relationships baked into contracts and networks sprawling across the country are a reflection of this. While everyone wants to make money, it is more than evident that people want to make a difference. Despite the risks, stress, unpredictability and curveballs altnets have endured and mistakes undoubtedly made, there seem to be few regrets, if any, and the broadband sector overall remains proud and upbeat, if possibly a little jaded. It is facing the future chest out, hoping for the best, preparing for the worst. So much seems conditional on other things happening down the chain. Investors want to know they’re going get a return, but that depends on the number of subscribers, and that depends on doing the build well and whether they get the promotion right and that depends on getting the package right and that depends on Openreach’s progress and in amongst all that they depend on getting the vouchers from BDUK. Ian Adkins agreed. “This does come down to the fact that it is on one level what seems a very simple business, but actually there are an awful lot of choices to make.”
industry either. The older we get the more difficult it is to tackle problems in an agile way. “You need to know when it’s time to step away,” Alex Marshall told me. “If the business is going to grow, you need to know when the time is right to let someone with the requisite skills and experience take it to the next level.” When it’s your baby, that’s really, really hard. The future? James Saunby, Consultant Director at GreySky Consulting, who has worked closely with altnets all over the UK takes a different view of Paddy Paddison’s earlier comparison with the cable industry of the 90s. “Consolidation will result in likely 10 large-ish companies around the UK, plus Openreach and Virgin Media followed by dozens of tiny ones catering for small communities around the country.” He did however concede that the process will take time. “Financing is a major issue for the altnets, with many relying on trickle funding from shareholders to keep operating, to keep the lights on. They aren’t expanding their networks anymore. If this dries up, it could accelerate consolidation through distressed asset sales,” James Barford pointed out, which nobody wants to see. He went on, “Competition thrives through people having a go. But in the current situation it’s a struggle. Whether it can succeed as a consolidated model or not is still unclear. It would certainly help a lot. Because part of the reason they’re struggling financially is that they’re all pretty small individually.” He concluded, “At some stage that kind of patience runs out. Debts do come due at some point, and obviously it’s mostly bank debt, but if the banks end up being in charge, they’ll sell off assets very quickly.”
2.2Gbps (Vodafone), so competing on speed alone, unless you are targeting only professional gamers, bitcoin miners or film editors is a tall order. You would probably manage to get Glastonbury tickets though. Building a brand through the build itself – building it locally rather than nationally, via community engagement, local knowledge and connections, makes a huge difference to altnet success, but like everything else in this area, takes time and there are yet more variables to consider. There is no one-size-fits-all solution. How the business started, who the players are, their relationship to the locality, how they are building and why, what the structure of the business even is. B4RN are famously non-profit, refusing to both be bought out or buy up other companies in a bid for expansion; they are solely concerned with providing high quality broadband to their own Cumbria/Lancashire footprint. Their integrity is a big part of their USP. Other companies meanwhile are causing disruption, facing angry petitions and protests in their areas, erecting telegraph poles in neighbourhoods for practical as well as reasons of speed and access, but the negative publicity this generated made national headlines last summer and is still ongoing. No altnet (or investor) wants that headache along with everything else. Pivot and Agility You can’t do it all. Engineering requires a specific skill set, a left-brain, analytical mindset, a problem-solving approach. Sales and marketing is another skill set altogether; right brain, extrovert, creative. Few of us are polymaths really. As a small business evolves from digging trenches and installing fibre, to an SME dealing with customer service enquiries and PR campaigns - that is a big pivot and with a small team it is difficult to be all things to all people. We are not a young
Ofcom’s annual report in December last year celebrates a 12% increase on homes passed in the UK. 20.7m homes now have access to full fibre broadband out of 30.1m households. 58,000, or 0.2% of premises (residential and small businesses) still have no access to decent broadband, a reduction from 61,000 in 2023. Meanwhile, satellite services are expanding as a new option for people and businesses to access broadband. In 2024, there were 87,000 connections across the UK, a more than doubling from 42,000 in 2023.
[Source: Ofcom, 2024].
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Volume 47 No.1 MARCH 2025
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