The UK’s fiber-to-the-premises (FTTP) alternative network (altnet) providers face mounting challenges in competing with established telecom players. Despite substantial investments in infrastructure, many altnet operators struggle to achieve profitability, with limited market penetration and insufficient customer acquisition. As dominant providers strengthen their positions, market consolidation appears inevitable for these emerging challengers, says GlobalData, a leading data and analytics company.
Robert Pritchard, Principal Analyst, Enterprise Technology & Services at GlobalData, says: “Although the number of FTTP altnets has shrunk from about 150 to 100 or so, very few are looking viable. Having spent so much in infrastructure rollouts, many have revenues only in the few tens of millions of pounds.”
GlobalData analysis shows the survival goal for these companies is 30% penetration of their addressable market. This remains a rarity.
Pritchard adds: “FTTP altnets have focused so much on expanding their networks, many seem to have neglected acquiring customers – business customers in particular. This is the fundamental reason behind ongoing market consolidation.”
With the accelerated fiber rollout by BT Group’s Openreach and Virgin Media O2’s nexfibre, altnets face significant challenges due to the lack of an established revenue-generating customer base to transition. These altnets, along with their go-to-market partners, are competing against well-established service providers such as Exponential-e and Neos Networks, further intensifying the competitive landscape.
Pritchard concludes: “Being one-trick fixed fiber connectivity purveyors is a fundamental problem. Finally, the penny is dropping that customers do not buy technology but services. Success depends on teaming up with the most effective resellers and internet service providers. If they are not generating revenue, networks have no purpose.”
