Updated: Feb 7
This article and infographic reveals the key performance metrics of the UK fibre market. The research compares the top 10 alternative fibre network operators to Openreach (BT Group) and Virgin Media O2 (VMO2). The research found that the top 10 alternative fibre operators have built fibre at a rate of 48,500 premises per week in the past six months, bringing fibre to an additional 1.2 million premises and bringing the total to 5.4 million premises passed. The top 10 alternative operators, VMO2 and Openreach expected to reach at least 78 million homes with fibre by 2026.
Altnets pass an additional 1.2 million premises
Our latest thought leadership research, which follows our State of the Fibre research last month and based on publicly available figures as of January 2023, shows that the top 10 alternative fibre network operators (altnets) now pass 5.4 million premises compared to 4.2 million premises in June 2022.
This additional 1.2 million premises is a 28% increase upon the number of premises passed by the top 10 six months ago.
Note that we define the top 10 altnets by the number of premises passed as of January 2023 which include CityFibre, Hyperoptic, Community Fibre, G.Network, Gigaclear, NetOmnia, Trooli, Fibrus, Brsk, and Toob.
CityFibre still tops the table but with reduced dominance
There is no surprise that CityFibre tops the altnet table with over two million premises passed as of January 2023. CityFibre also scores top position for the most net additions since June 2022 adding 300 thousand additional premises passed to its tally.
However, CityFibre has reduced its dominance over the altnets. In June 2022, CityFibre’s tally represented 41% of the premises passed by the top 10 which now stands at 37%. This is due to significant gains made by altnets Jurassic, BRSK, Fibrus, Trooli and NetOmnia.
In the last six months, for example, Trooli passed an additional 225 thousand premises while NetOmnia passed an additional 170 thousand premises. Collectively, these five altnets pass a significantly greater share of premises now (18%) compared June 2022 (10%) reducing CityFibre’s dominance.
Altnet build rate is no match for Openreach
Build rates are often used by fibre operators to demonstrate their prowess and progress to achieving fibre domination. Over the last six months, the top 10 altnets have achieved an average monthly build rate of 194 thousand premises per month which is an average weekly build rate of 48,500 premises.
Altnet weekly build rate of 48,500 premises
While this build rate seems impressive it is just outperformed by Openreach which is estimated to be building fibre to around 52 thousand premises per week. VMO2’s fibre build rate is unclear as of yet, although their project lighting rollout is estimated to have reached over 100 thousand premises in Q1 2022.
Enough fibre for 78 million homes
One of the fibre industry’s key obsessions is around overbuild and how that will affect market structure, competition and choice for consumers. It is important to state at this point that Ofcom set out to promote investment and competition in fibre networks as far back as 2018 to increase consumer choice.
Our research estimates that the top 10 altnets will build full fibre networks serving around 30 million premises by around 2026/27. VMO2 estimates that it will build fibre to 23 million homes while Openreach plans to build fibre to 25 million homes by 2026. Collectively, the top 10 altnets, VMO2 and Openreach will reach at least 78 million homes with fibre by 2026.
2.78 overbuild index
This staggering statistic results in an overbuild index of 2.78 i.e., on average each home will have access to 2.78 fibre connections. Clearly, the overbuild index will be higher in urban areas and lower in rural areas where fibre build and choice is limited.
Altnet investments top GBP 12 billion
Another useful statistic used by the fibre industry to measure financial performance is cost per premise passed (CPPP).
Our research shows that, as of January 2023, the top 10 altnets have committed GBP 12 billion to building full fibre networks in the UK by 2026/27. This is a GBP 2 billion increase (20%) since June 2022. Interestingly, Openreach too has publicly committed GBP 12 billion to achieve its 2026 build target. However, VMO2 plans to invest only GBP 4.5 billion to expand its UK fibre footprint.
Average altnet CPPP of GBP 397
Based on their investments and committed build targets, we estimate that the averaged CPPP for the top 10 altnets to be GBP 397 per premise passed. This is within range although at the higher end of Openreach’s publicly stated average build costs which fluctuate between GBP 300 to 400 per premise passed. VMO2 estimates that it can build fibre to homes for significantly less (at around GBP 100 per premise) by making use of its existing duct network, thereby reducing civils costs.
What all this means
The top 10 altnets seem to be a match for Openreach across a range of performance metrics.
Still opportunities for altnets to grow
A high level of overbuild can be an issue for altnets that don’t invest in market analysis. There are still opportunities for altnets to grow market share using one of four strategies we presented in an earlier report.
Provided they don’t overbuild each other’s networks and they connect premises to generate cash we have seen altnet business plans work. Smaller altnets already serving rural areas are less likely to be threatened by Openreach and VMO2 where demand for reliable high-speed connectivity is high and sticky.
It remains to be seen what impact global economic uncertainty is having upon altnets which may force some of them and their investors to revise their plans.
About Intelligens Consulting
Intelligens Consulting is a telecoms and smart city management consultant to investors, operators and public bodies. Our expert and senior team is experienced in networks, strategy, economics, procurement, and financing. Contact us to discuss anything further at info@IntelligensConsulting.com.
Editorial Update - 07 February, 2o23
Shortly after compiling this data we were advised that CityFibre now passes 2.5 million premises and that NetOmnia is at 380 thousand premises passed to date. This data will be incorporated into a future release. This happens as data compiled from public sources is not released simultaneously. We are commissioning primary research later this year to reduce the dependency on public figures, so watch this space.
Disclaimer: Although we take every effort to present a robust analysis, the data used in this article has been gathered from public sources. Intelligens Consulting assumes no responsibility or liability for any errors or omissions in the content of this article. The information contained in this article is provided in good faith on an "as is" basis with no guarantees of completeness, accuracy or timeliness.