The Altnet Boom – A Disruptor’s Playground?

A few years ago, alternative networks (altnets) looked like the future of UK broadband.

Frustrated by Openreach and Virgin Media’s slow fibre rollout, customers wanted better options.

Investors saw an opportunity, and altnets rushed in – promising faster speeds, fairer prices, and better service.

Fast forward to today, and the landscape has shifted. Many altnets are struggling, and consolidation is sweeping the sector.

Some will survive. Others won’t.

So, who’s winning, who’s losing, and why?

Big Assumptions vs. Harsh Reality

Altnets entered the market with bold assumptions. Now, these assumptions are facing serious challenges:

Assumption: Customers would flock to better broadband

Reality: Switching is harder than it looks. Brand loyalty, bundled deals, and customer inertia keep many locked into their current provider.

Assumption: Regulators would tip the scales in their favour

Reality: Ofcom backed competition, but Openreach fought back with aggressive wholesale pricing (like Equinox 2). And Virgin Media doubled down on expansion. Smaller players are being squeezed.

Assumption: Investor cash would keep flowing

Reality: With rising interest rates and a tougher economic climate, funding has largely dried up. Many altnets now face a stark choice: merge or collapse.

Assumption: Rolling out fibre would be straightforward

Reality: Labour shortages, planning hurdles, and overbuild chaos – where multiple providers compete in the same area – have driven up costs and slashed customer acquisition rates.

A Brutal Market: Too Many Networks, Too Few Customers

At its peak, over 100 altnets were laying fibre. Now, they face mounting pressures:

· Overbuild madness – Some towns have three or more providers fighting for the same customers. It’s unsustainable.

· Cash burn – Many rely on deep discounts to win subscribers, making profitability a distant dream.

· Customer inertia – Even with better deals, many households stick with their current provider rather than switch.

· Investor fatigue – The funding spree is over. Investors are backing only those with a clear path to sustainability.

The result? A major shakeout is already underway.

Who Will Survive?

The altnets that endure will master four things:

1. Winning Customers – Laying fibre isn’t enough. The winners will build strong brands and deliver standout service.

2. Financial Strength – Those with manageable debt, deep-pocketed investors, or solid profitability will stay in the game.

3. Market Focus – Altnets targeting underserved areas (rural or niche urban markets) stand a much better chance than those battling in oversaturated cities.

4. Innovation – Expect survivors to differentiate with AI-powered support, smart home services, or bundled packages.

So, who’s in the best position to make it?

CityFibre – The biggest independent altnet, backed by wholesale deals with Sky, Vodafone, and TalkTalk.

Community Fibre – Fast-growing in London with strong financial backing and high take-up rates.

Hyperoptic – Carving out a niche in high-speed fibre for apartment buildings.

Netomnia/Brsk – A merger that strengthened their market position.

Gigaclear – Dominating rural areas with government-backed expansion.

FullFibre/Zzoomm – Another smart merger improving scale and efficiency.

On the flip side, the majority (at least half to two-thirds) of the remaining altnets will take a bit of a pasting – with only a handful managing to establish a sustainable long-term position.

At least three companies from this list will need to restructure, while both Openreach and VM are facing higher-than-expected line losses.

Bottom line: Expect more mergers, fire sales, or outright failures.

The Future: The Shakeout Begins

The altnet gold rush was fuelled by a simple promise – better broadband, faster.

The demand is there – yet so are the brutal realities of competition, shrinking funding, and execution missteps.

The winners? They’ll be the ones who adapt fast, forging smart partnerships, expanding strategically, and keeping their finances rock solid.

And the rest? Survival isn’t guaranteed.

The market is shifting, consolidation is accelerating, and only those who can prove their value will make the cut.

The shakeout has begun.

About the author

David Hilliard is founder of Mentor, specialists in strategic program execution.

You can call him on 0118 359 2444 or email david.hilliard@mentoreurope.com.