Altnet Consolidation Is Paving the Way to Mitigating Challenges in the Market

Over the past decade, the UK’s broadband landscape has evolved significantly due to the emergence of alternative network providers (altnets). They have been instrumental in accelerating the rollout of full-fibre broadband, helping to expand gigabit-capable coverage to 84% and helping to push the government closer to its 85% target. 

Providing an alternative to traditional ISPs like Openreach, altnets have worked to bridge the connectivity gap by furthering broadband coverage in underserved rural areas, engaging directly with local communities, hosting community events, and directly involving residents in planning decisions to meet their specific needs.

As a result, some major altnets have become mainstay challengers to the legacy players in the sector. For example, CityFibre reported its first year of profitability in 2024, adding over 181,000 net new customers, reaching 518,000 total live customers. These providers have demonstrated the viability of alternative networks at scale, leveraging strategic partnerships and aggressive rollout plans to challenge the dominance of legacy ISPs.

Manoeuvring a cautious investment climate? 

However, despite growing success in deploying fibre infrastructure and bringing high-speed connectivity to underserved areas, some UK altnets face challenges in turning that investment into sustainable revenue. Low brand awareness, consumer reluctance to switch providers, and growing competition from established ISPs have made customer acquisition difficult. Meanwhile, overbuild is emerging as a significant issue, with larger ISPs duplicating network construction in areas where altnets have already invested, further intensifying the competitive landscape.

The investment climate is also becoming increasingly challenging with rising interest rates fuelling debt costs.

Partnerships – a key growth strategy

As competition intensifies, deployment costs rise, and the pressure to achieve profitability grows, some altnets are turning to mergers and acquisitions (M&A) as a strategic path to scale. Consolidation enables them to expand network coverage, reduce operational costs, and strengthen their competitive position against larger incumbents. M&A also offers access to new customer bases, the potential to streamline infrastructure investments, and an opportunity to attract further funding by demonstrating long-term viability in an increasingly crowded market.

Partnerships are proving equally essential for altnets to scale efficiently and extend their reach. By collaborating, altnets can share infrastructure, avoid redundant build-outs, and expand coverage more cost-effectively. For example, Gigaclear’s partnership with Voneus is accelerating rural network expansion, while CityFibre is teaming up with altnets and wholesale providers to create a more interconnected network.

Major ISPs are also leveraging altnet networks to extend their services without significant infrastructure investment. Vodafone’s partnership with CityFibre, for instance, is facilitating gigabit broadband expansion, while TalkTalk is collaborating with regional players like Freedom Fibre to tap into new markets. These partnerships offer mutual benefits—altnets gain revenue and access to a wider customer base, while ISPs expand their coverage in a cost-effective manner.

If the connectivity market is to successfully compete to attract investment from data centres back to core network upgrades, altnets will need to demonstrate scalability and cost-efficiency to attract funding. In this landscape, strategic partnerships will be vital in securing capital and ensuring long-term sustainability.

Unlocking efficiency through Open Access Networks

Open Access Networks (OAN) enable multiple service providers, such as altnets and traditional ISPs, to share the same infrastructure, typically consisting of fibre optic cables, data centres, and other network elements. This model allows providers to lease access to the network rather than investing in building their own, reducing redundancy and cutting the costs of expansion. 

For altnets, it offers an efficient way to monetise networks, especially in densely populated areas where competition is fierce and customer acquisition is challenging. By focusing on shared infrastructure, OAN eliminates the need for multiple providers to duplicate efforts in building separate networks, leading to lower overall costs for everyone involved.

In addition to cost savings, OAN fosters a level playing field, enabling smaller players to compete with larger ISPs. Providers can focus on differentiating their services, such as through customer service, pricing, and unique offerings, rather than competing on network ownership. This leads to better service options for customers and encourages innovation within the market. 

The importance of cultural fit

For altnets looking to scale efficiently, choosing the right partners is about more than just technical capability; it’s about cultural and operational alignment. A provider that prioritises flexibility, responsiveness, and customer-centric service can help altnets maintain agility in a fast-moving market. 

Avoiding rigid, bureaucratic structures and instead working with partners that offer tailored, high-capacity solutions ensures altnets can expand rapidly without unnecessary constraints. As the sector continues to evolve, strong partnerships built on shared values and strategic alignment will be key to delivering widespread, high-quality digital access.

As the market continues to transform, it is expected that this trend of collaboration will continue, enabling altnets to remain key players and foster a more innovative and competitive broadband landscape across the UK.

The views expressed in this article belong solely to the author and do not represent The Fast Mode. While information provided in this post is obtained from sources believed by The Fast Mode to be reliable, The Fast Mode is not liable for any losses or damages arising from any information limitations, changes, inaccuracies, misrepresentations, omissions or errors contained therein. The heading is for ease of reference and shall not be deemed to influence the information presented.

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