Independent full fibre networks reach 25% of UK homes

The Independent Networks Cooperative Association (INCA) has released a report detailing the rollout of full fibre broadband by small independent networks.

The annual report reveals these smaller networks, or altnets, have now passed 8.22 million premises as of the end of December 2022. INCA also estimate altnet coverage to reach 14.22 million by the end of this year.

In typically underserved rural areas, altnets have also nearly matched the coverage figures of Openreach, despite previous concern from Ofcom these areas would remain uncompetitive.

Credit: Brian A Jackson/Shutterstock.com

Full fibre coverage

Full fibre broadband coverage has now reached over 15 million premises as of early 2023 in total, so its impressive 8.2 million of that is covered by smaller altnets.

Although perhaps not surprising when its also being reported as many as 2.5 million premises can choose between two or more full fibre networks, and 1.6 million have the choice of three or more.

Not inclusive of Openreach and Virgin Media, altnets include all other smaller fibre networks, such as CityFibre, Hyperoptic, Community Fibre, and Gigaclear, as well as many more localised network providers such as Fibrus, Grain, and B4RN.

CityFibre is the largest altnet, reaching over 2.5 million premises and is resold by both TalkTalk and Vodafone. Hyperoptic have also passed over 1.15 million premises, while Community Fibre has reached over 900,000 premises in London.

Check full fibre broadband availability in your area.

Competition

One of the areas of concern raised by the report however, is that of competition. Both in terms of overbuild from other altnets operating in the same areas, and wholesale pricing by the incumbent provider Openreach.

It's been said full fibre networks will need to achieve a take-up rate of around 40% in active areas in order to remain profitable, yet there are already 1.6 million premises with a choice of three or more full fibre networks.

While choice is good for consumers, the issue of competition and overbuild at such an early stage of the new full fibre market suggests we could see future mergers.

Equinox 2

In addition, the issue around Openreach's proposed Equinox 2 wholesale pricing cuts were also raised in the report. With altnets pushing against the price cuts.

INCA say Ofcom should block the pricing cuts proposed in Equinox 2 as they believe it will stifle investment in smaller networks.

Particularly, they say, underserved rural areas where there is investment being made by altnets should be taken further into consideration by the regulator who currently sees large rural areas as being less competitive than INCA suggests they are.

The report highlights how altnets have planned investment into the full fibre rollout of over £24 billion to reach the Government's 99% coverage targets by 2030. They say, it's more than BT Openreach and Virgin Media's investments combined, with BT Openreach investing £15 billion, and Virgin Media investing £4.5 billion to reach a further 7 million premises.

However, it should be said, Virgin Media are also investing around £14 billion into upgrading their entire existing network to XGS-PON, or full fibre to the premises, over the next five years.

INCA CEO Malcolm Corbett commented, "Equinox 2 is a live and pressing concern. It has the potential to unfairly foreclose the wholesale market, including in areas where Ofcom mistakenly thought only Openreach might get to, but where it is abundantly clear that Altnets are investing significantly and where they are already making full fibre broadband services available to millions of people."

Switching

Lastly, the report touches on the industry-wide switching solution One Touch Switch, that was meant to be operational by April 2023.

Ofcom announced in April they would be launching an enforcement program as providers didn't meet the deadline for the new system to be in place.

Yet, INCA mention how the cause of the delay is due to the shared messaging hub set up to handle the switches would not be ready for testing until August 2023, with the system planned to go live later in the year.

It looks unlikely then that consumers will see gaining-provider led network switching before 2024.