The future of UK fiber is considered by some to be in flux — the relentless race to make gigabit-capable broadband accessible across the nation heats up daily. Key players include both UK incumbents and alternative network providers, also known as “AltNets.” These groups are creating a digital infrastructure essential to business growth, public service improvement, and job creation. Nevertheless, the playing field has proven to be diverse and always evolving, leaving the number one spot up for grabs.
Notably, the AltNets have shown proactive strategies by deploying networks at a speedy pace, backed by investment from Private Equity firms. They are projected to provide service to over 11.5 million homes — half of all properties in England and Wales — by the end of 2023. They have been proactive in pinpointing areas where connectivity enhancements are critical, diverting attention from the densely populated urban landscapes.
The incumbent companies aren’t sitting idle, either. It’s imperative for these traditional players to build upon their current market share, and the fiber rollout presents an ideal opportunity. A prime example is Openreach’s move to decrease the pricing of their wholesale lines, aptly titled Equinox 2. Critics argue it’s a predatory pricing approach to quash the competition, but the lowered prices may assist ISPs in deepening their penetration for full fiber connectivity.
Ofcom predicts a bright future for full fiber, suggesting it will reach over 80% of UK homes in the next two years — an accomplishment boosted by the competition amongst AltNets. However, consolidation is inevitable. The telecom landscape will likely not support multiple entities battling for a share of the market in any given location. Yet, even amidst potential consolidation, there are opportunities to cater to the demands of data-hungry customers in new business zones, tech hubs outside of the capital, and multi-business units. For instance, there are suggestions that VMO2 is preparing to acquire wholesale fibre provider CityFibre, which would seriously bolster its position.
AltNets have successfully “lit up” the UK, but there are some hurdles needing attention to level the playing field. Smaller players may feel the strain when aggregating connectivity, due to additional fees and the need for self-validation. Government intervention is paving the way for future rollouts, with the recent trial of flexi-permits, which allow telecom companies to work across multiple streets under a single permit. This is an example of how the government can play a crucial role in expediting the infrastructure’s deployment.
With the acceleration of infrastructure builds, service providers must concentrate on aggregating their businesses and local communities to the areas where demand peaks. Bigger AltNets are finding new opportunities by offering business connectivity services, increasing their market reach and revenue streams. For instance, Talk Talk recently announced their plans to use CityFibre’s network to accommodate their business customers, a clear hit at incumbents.
With the promising future of the UK’s fibre scene, improved customer understanding of what is achievable through connectivity is paramount. An excellent example is Oxfordshire County Council’s progression towards becoming a ‘smart county,’ with improved Wi-Fi hotspots and the use of their network to enable future innovation, such as drone corridors and smart vehicles.
Understanding of connectivity as an enabler for business efficiency and lifestyle alterations will drive full fibre service adoption. In this dynamic landscape, Simon Wilmott, Director of Wholesale Business Development at Neos Networks, suggests that companies differentiate themselves by highlighting their added value to customers.
