UK altnets to invest nearly £12bn in fibre by 2025

More than 2.5 million homes and businesses in the UK can now connect to a fibre broadband network delivered by an independent supplier, according to new research published by the Independent Networks Co-operative Association (INCA).

INCA defines an independent operator as an organisation deploying broadband infrastructure for wholesale and/or retail use, which is not part of either the UK’s incumbent operator BT Group, or Virgin Media as the national cable operator.

The study, compiled for INCA by research firm Point Topic using data provided by independent network operators, provides an overview of the UK’s independent network operator sector at the end of 2020 and early 2021 in terms of scale, coverage, ambitions and concerns. It includes both fixed and fixed wireless network operators.

The study found that the UK’s independent sector is four times larger than a decade ago and continues to attract significant private investment. INCA said its survey found that interest and commitment were growing strongly in the independent network sector, with £5.6bn of investment and expenditure already spent or committed to be spent in early 2021.

From survey inputs and research, it estimated that intended capital expenditure by the sector from now until the end of 2025 at over £10.8bn, with operational expenditure of at least £1bn.

The reach to 2.5 million premises displayed in the research represents over 110% year-on-year growth and compares with 52% from 2018-2019. The majority of installations are based on gigabit fibre-to-the-premises or home (FTTP/H) and fibre-to-the-building (FTTB) technology, with some legacy VDSL gradually being phased out. Fixed wireless access (FWA) networks were estimated to cover over more than two million premises, although not all will have full service available.

The report also found that 845,000 properties are currently connected to either a full-fibre or gigabit fixed independent network, and gigabit infrastructure supplied by independent operators is expected to reach over 6.6 million premises at the end of 2021. An estimated 1.1 million of these will be live connections.

Looking forward, the study forecast that by the end of 2025, nearly 30 million homes and businesses will connect to an altnet, with about 6.2 million live connections made. However, INCA stressed that these footprints include some double counting, as networks will overlap in some of the most desirable locations.

“This report demonstrates that the ‘altnets’ are making a major contribution to meeting the government’s targets for gigabit broadband connectivity,” said INCA CEO Malcolm Corbett. “This current wave of investment, particularly in full-fibre and wireless broadband networks, means there is no segment of the market where there isn’t a plan to build independent networks. This should be applauded and supported by government, regulator and the wider community.”

Point Topic CEO Oliver Johnson added: “Full-fibre coverage from the independent sector is significant and accelerating. Conditions in the UK are encouraging for the altnets. Demand and supply are being driven by a renewed consumer appreciation and desire for better downstream and upstream capacity and stability, as well as access to more finance and an encouraging regulatory environment.”

Individual altnets cited in the report included community broadband provider County Broadband, based in Aldham, Essex, which received a £46m private investment in 2018 from Aviva Investors to build FTTP networks in rural and hard-to-reach premises across the East of England. The company has made a seven-fold workforce increase over the last three years and is now engaging with over 100 villages in its FTTP roll-out.

Chief executive Lloyd Felton said the accelerating roll-out of full-fibre networks is a testament to the hard work of independent ISPs in identifying new market opportunities, lobbying for more training and skills, investment and collaborating to share insight and improve efficiency.

“FTTP technology has emerged as the clear front-runner for delivering future-ready speeds and altnets have raised significant capital from enthusiastic investors,” said Felton. “The focus now must be on removing barriers so that these complex infrastructure projects can progress quickly to meet the government’s ambitious gigabit targets. We also need to continue educating consumers about the benefits of real full-fibre compared to their existing copper connection.”