Altnet take-up lags at 50% of Openreach

Wed, 8/05/2024 - 14:26
Eight Advisory

The average consumer take-up across altnet networks is currently at 16%, half that of Openreach at 32%, despite the collective footprint of challengers now equalling that of the incumbent.

This comes from the first part of a report released by Eight Advisory UK that highlights the struggle of UK altnets to break into this significant route to market.

The report shows how 90% of the Consumer ISP market is served by five large brands, (BT, Virgin Media O2, Sky Broadband, TalkTalk and Vodafone), noting that altnets face both strong retail ISP competition but with much smaller footprints.

Maturity is a key factor as BT states that its earliest FTTP cohorts are now at 50% penetration and rising, whilst newer cohorts are following a similar trend.

Conversely, the longer-established altnets report an average take-up across their networks of around 30% with fluctuations impacted by changes in rollout speed and some churn.   Take-up for Altnets with newer networks is lower than 10%.

Eight Advisory also highlights that the proliferation of multiple small networks makes it costly and complex for the larger ISPs to work with altnets.

Therefore, looking at the landscape of around 100 vertically integrated altnet players, Eight Advisory concludes that is likely that consolidation will take place over the course of 2024 and beyond, impacted both the retail and wholesale markets.

Partner of Eight Advisory Nick Breadner said: “The expected consolidation will shake up both the retail and wholesale markets but the combined challenges of agreeing valuations, managing integration at the network, operational and commercial levels, potential carve outs and onboarding new larger ISPs will provide new challenges for altnets and the emerging consolidators”.

Report co-author and special advisor to Eight Advisory, Chris Stening added: “In a market set for consolidation, fewer networks delivering a larger number of homes will make it more attractive for the larger ISPs to partner with altnet networks. This will drive take-up further with the marketing efforts of the large ISP brands. There are however many examples of current altnet good practice & learnings which we will cover in part two of our report.”

To read part one of Eight Advisory’s report in full, please visit: Fibre to home - Part 1 

A second part will follow, providing valuable insights and actionable recommendations to support altnets in achieving their commercial and financial objectives.

Stening will also be speaking on strategies for commercial growth at the UK Fibre Summit, held at the Forest of Arden Hotel on 11th July. Register to attend here: