UK Broadband’s Next Battle: Survival, Scale and the Rise (or Fall) of the Altnets

By Gareth Williams, Senior Analyst with contribution from Ross Duke, Ex CTO, Full Fibre 

As the UK nears gigabit saturation, the challenge for alternative network operators (altnets) is shifting from rollout to survival. Can they build the scale, brand strength, and financial resilience needed to compete with the big four fixed broadband providers — BT, Sky, Virgin Media O2, and TalkTalk — or will consolidation, cash-flow pressures, and market failures thin their ranks? 

Gigabit coverage in the UK has achieved >85% of premises, with FTTP representing around ~30% of fixed broadband connections¹, with a large percentage of customers having access to more than one FTTP network (Intelligens Consulting last estimated an overbuild factor of 2.78 fibre connections per home in 2023), more attention is likely to turn to the overall competitiveness of the UK's fixed broadband market.

In recent years, many altnets have focused on driving customer take-up rather than accelerating build-out in an effort to extend their runway. Those unable to move the take-up needle risk losing access to capital, with lenders such as NatWest and Lloyds now setting higher thresholds for new loans (FT, 2025). 

Vodafone’s Breakthrough – Setting the Standard for Cross Selling 

Since 2014, only one provider has come close to breaking into the top tier: Vodafone (see Figure 1). Leveraging its national brand and mobile subscriber base, Vodafone has steadily gained share through effective cross-selling. In contrast, TalkTalk has lost ground — hindered by reputational damage following the 2015 data breach, persistent customer-satisfaction issues, and reduced marketing spend, despite acquiring several ISPs including Post Office Broadband and Shell Energy Broadband 

Figure 1: Fixed broadband market share, UK (2014 to 2034). Source: Ofcom, company filings, Intelligens Consulting analysis.                                 F – Forecast 

FTTP-based altnets have also begun to capture subscribers, contributing to a decline of more than 700,000 Openreach broadband connections in 2024, with further reductions expected in 2025. Only a handful of altnets — notably Hyperoptic and Community Fibre, alongside multi-service ISP Utility Warehouse — have achieved market shares exceeding 1%. The key question now is what the next decade will bring: can altnets convert niche regional footprints into sustainable national market presence, or will the market consolidate around a few scaled players? 

BT, Sky, and VMO2 Dominate While Challengers Can Broaden Appeal 

BT, Sky, and VMO2 are likely to continue dominating the UK broadband market over the next decade. 

BT’s strong standalone brand, supported by EE’s converged offerings and the value-focused Plusnet sub-brand, positions it to serve multiple customer segments effectively. 

VMO2 should leverage its powerful Virgin Media and Volt brands, extend reach through the Nexfibre footprint, and use giffgaff to target price-sensitive consumers. 

Sky, supported by Now Broadband and Sky Glass, will retain appeal through its strength in content and bundled entertainment. If TalkTalk’s current performance persists, it risks slipping into the “others” category. 

Vodafone remains the only new entrant to have gained meaningful share since 2014, using its national brand and large mobile base to cross-sell fixed broadband. Together with Three, it can continue to erode the incumbents’ advantage by widening brand appeal and offering converged mobile–fixed propositions. Three is likely to focus on its 5G Hubs as a flexible fixed-line alternative for students, transient professionals, and residents in multi-dwelling units where fibre installation is constrained. Vodafone could similarly add fixed broadband or 5G Hubs to its VOXI brand to engage younger, mobile-first consumers. 

While altnets lack the brand strength of Vodafone or Three, they can still broaden appeal through sharper segmentation, new partnerships, and differentiated marketing channels — critical steps if they are to compete for share in an increasingly consolidated market. 

Altnets Must Churn Customers from ISPs Particularly in Overbuild Areas 

In the short term, altnets can continue focusing on driving take-up within their existing footprints. However, as networks mature, they should increasingly look for ways to churn customers from ISPs that depend on Openreach — particularly where they are being overbuilt with FTTP. Physical upgrade works by Openreach or Virgin Media can provide a timely trigger for targeted marketing campaigns. Altnets can also use customer data gathered during rollout to design more precise offers and incentives. 

In the medium to long term, the challenge shifts from network build-out to brand consolidation and commercial efficiency. Any merger or acquisition among altnets — whether driven by CityFibre or others — carries implications for brand equity and customer loyalty. A name that resonates in South Wales or Inverness may mean little to households in Bristol or the Lothians. Integrating networks is straightforward; integrating brands and customer relationships is not. 

Cuckoo is attempting to bridge that gap. Backed by Fern Trading and Octopus Investments, it has moved beyond the combined networks of Jurassic Fibre, Swish Fibre, Giganet, and AllPoints Fibre by securing wholesale access to Openreach and CityFibre. Its model — mirroring the wider Octopus Group’s success in energy — shows how a unified, service-led brand can scale through superior customer experience and cross-selling to existing Octopus Energy users. 

Other altnets pursuing consolidation need equally strong brand and channel strategies while keeping network opex and subscriber acquisition costs in check. Multi-brand portfolios can work when each targets a distinct customer segment through differentiated channels. The MVNO sector offers relevant lessons: Tesco Mobile leveraged its retail footprint, while Lebara and Lycamobile grew through low-cost international calling and convenience-store partnerships. For altnets, differentiation may instead come from alliances with trusted consumer communities — for example, partnerships with Saga to reach retirees or with Mumsnet to engage young families. 

To remain competitive, altnets must evolve from network builders into brand-driven digital service providers — combining operational efficiency, targeted marketing, and selective partnerships to sustain growth and readiness for consolidation. 

Local Authority and Council Leaders Must Rethink Investment to Safeguard Rural Connectivity 

For local authorities still seeking to extend fibre coverage into rural or hard-to-reach areas, this market shift presents a risk. As private investment tightens and smaller altnets face consolidation, the likelihood of purely commercial rural rollout diminishes. Without structured intervention, many communities could be left behind. 

Councils therefore need new partnership models that attract private capital while aligning with public-sector objectives — not traditional subsidies but co-investment frameworks that de-risk deployment and accelerate delivery. 

Intelligens Consulting works with both altnets and local authorities to bridge this market gap. 

For altnets, we help build resilient growth strategies — separating retail and wholesale functions, strengthening brand positioning, and preparing for investment or acquisition. 

For local authorities, our Digital Investment Partnership model (DIPM) helps unlock private investment where commercial build is unlikely, enabling councils to extend digital infrastructure, attract operators, and stimulate rural fibre delivery without direct subsidy. 

As competition intensifies and funding pressures grow, aligning private investment with local outcomes will be essential. Intelligens Consulting brings the insight, tools, and proven frameworks to make that happen. 

1 – Sources: Ofcom Connected Nations 2024 and Thinkbroadband 

2 – Sources: BT and Intelligens Consulting analysis 

3 – Sources: Company fillings, press releases and Intelligens Consulting analysis