After years of extraordinary investment, the UK broadband market is entering a new phase – and the builders who changed the industry are about to discover what happens next.

On 17 March, Ofcom will publish its latest Telecoms Access Review, setting the regulatory direction for the UK broadband market for the next several years.

Normally these reviews pass quietly through the industry – read by regulators and lawyers and largely ignored by everyone else.

This one arrives at a rather different moment.

In a remarkably short period, Britain has experienced one of the most aggressive fibre infrastructure builds anywhere in Europe.

Billions of pounds of private capital have poured into the sector. Streets across the country have been dug up as new networks raced to deploy fibre.

For much of the past decade the UK broadband market carried a slightly sleepy reputation. Coverage lagged other European countries. Investment was cautious. And Openreach was often criticised for moving at what one commentator memorably described as the pace of a camel on Valium.

That reputation has now disappeared.

Before getting lost in debates about regulation, consolidation or economics, it is worth recognising something important.

The builders deserve real credit

A handful of industry figures – sometimes applauded, often criticised – pushed the UK fibre market forward at extraordinary speed and changed the trajectory of the industry.

First among them is Greg Mesch

For years the prevailing view was that Openreach’s wholesale position was simply too entrenched to challenge. Building a serious national alternative infrastructure platform looked improbable to many observers.

Greg Mesch thought otherwise.

Under his leadership CityFibre became the first credible large-scale wholesale challenger the UK had seen in decades. The scepticism was intense and the brickbats plentiful.

Yet persistence gradually changed the conversation.

Today CityFibre stands as the most significant alternative infrastructure platform in the country – something that would have sounded highly unlikely not so long ago.

Next comes the question of consolidation

With Mesch stepping back from the front line, the baton now passes to Simon Holden, who may discover that the next phase of the story is very different from the one his predecessor faced.

The early years of the fibre boom were dominated by construction. New networks raced to extend coverage across the country. But as those networks increasingly overlap and capital markets tighten, the industry is moving into a new phase.

That phase is consolidation.

Multiple fibre infrastructures now compete in many of the same streets. Customer take-up is improving but remains slower than some early investors expected. Infrastructure markets rarely sustain this level of duplication.

If consolidation unfolds as many expect, Holden may yet find himself helping to shape what the long-term challenger platform to Openreach ultimately becomes.

Meanwhile something equally striking was happening inside the incumbent

Under Clive Selley, Openreach underwent one of the most remarkable operational transformations the sector has seen.

For years critics complained that the organisation moved too cautiously. Under Selley the company shifted decisively away from incremental copper upgrades and embarked on one of the largest fibre deployment programmes anywhere in Europe.

The scale of that engineering effort is easy to overlook. Passing tens of millions of homes with fibre is not simply a telecom upgrade. It is one of the largest civil engineering programmes undertaken in Britain in decades.

Selley deserves enormous credit for that turnaround.

But not the sort of recognition where someone declares themselves worthy of a Nobel Peace Prize!

But judged purely on the scale of the engineering achievement, the Openreach fibre program under his leadership comes surprisingly close.

The next chapter now falls to Katie Milligan, who knows the organisation intimately and has played a central role in its commercial strategy. Few in the industry doubt she will step comfortably into the role.

Alongside this transformation, another major player has been pursuing a rather different strategy

Virgin Media O2 entered the fibre race from a completely different starting point. It already possessed a vast infrastructure footprint and millions of retail customers.

Rather than building from scratch, its task has been to evolve and expand an existing network – upgrading its hybrid fibre-coax platform while supporting fibre expansion through nexfibre.

In a market that may now be entering a consolidation phase, the value of an enormous existing customer base should not be underestimated.

Perhaps the most intriguing insurgent story belongs to Netomnia

In only a few years it has moved from relative obscurity to become one of the fastest fibre builders in the country. Under Jeremy Chelot and Callum Dick, the company has demonstrated what disciplined execution and focused capital can achieve in a market many assumed was already spoken for.

That success has inevitably attracted attention.

Netomnia now finds itself at the centre of a possible acquisition by nexfibre, a move that could materially reshape the competitive landscape – although the Competition and Markets Authority may yet have a few comments to make when it reviews the proposal.

Amid all the debate about competition and consolidation, one point deserves emphasis

Much of the infrastructure now being deployed across the UK is state-of-the-art fibre, designed from the outset to support enormous bandwidth growth and future service innovation.

Unlike the copper networks that evolved slowly over decades, these platforms are being built with modern architecture capable of supporting the digital services of the next generation.

In other words, the industry has not simply upgraded broadband speeds.

It has built the digital backbone of the next phase of the economy.

Which brings the story back to where it began

Ofcom’s review arrives just as the fibre market moves from its construction phase into something more mature.

The next challenge will not be building networks.

It will be making them economically sustainable.

Customer migration from copper will accelerate. Take-up will become more important than coverage. Overlapping infrastructure will gradually rationalise as consolidation takes place.

Some networks will merge. Some will be acquired. Some will quietly disappear.

That is not failure. It is simply what infrastructure markets tend to do once the initial gold rush ends.

Britain didn’t just build a national fibre network. It built several – sometimes competing for the same lamppost

The industry will now discover how many of them the market can sustain.

But whatever structure ultimately emerges, one thing is already clear.

The UK fibre market did not accelerate because regulators wrote consultation papers.

It accelerated because a small group of determined builders decided to change the industry anyway.

And that, more often than not, is how infrastructure revolutions actually happen.

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.