The UK’s alternative network providers (“altnets”) jumped in around 2018 and, backed by billions in investment, put a rocket under the country’s fibre rollout. Superfast fibre is now within reach for over 40% of homes and businesses, edging closer to the government’s 96% coverage target for 2027.

But, the big players – woken up by the competition and nudged by the government – are fighting back hard with their own fibre plans. Add in a shaky economy and investors getting nervous, and suddenly, life isn’t so easy for many altnets.

To get a handle on what’s going on, Neos Networks had a chat with 100 altnet bosses across the UK.

Competition, cash flow, and red tape

One of the biggest headaches? Everyone’s digging up the same streets. In many places, you can now choose between three or even four fibre providers. Great for consumers, but a nightmare for altnets trying to sign people up.

Over half (55%) said their biggest battle is customers already locked into deals with the big names. People know BT, Sky, and Virgin Media; switching to a new name often feels like too much bother, or even a bit risky, even with schemes meant to make it easier. Plus, many altnets only do broadband, while the giants can offer tempting multi-play bundles of TV, mobile, and more.

Money’s tight, too. The cost of actually building the networks keeps going up, making it even more crucial to get customers signed on the dotted line. Investors? They used to be easier to find, but now they want proof of customers before opening their wallets.

Almost half the altnets (46%) said getting funding has become harder in the last year. Sky-high interest rates aren’t helping (blamed by 48%), and neither are regulatory hurdles and tough lending rules (both 41%). On top of that, BT shutting down its old copper network is set to leave expensive holes in Altnet coverage—costing them £1.4 million on average to fix.

Then there’s the shadow of Openreach. Altnets continue to fret about its market power.

Lee Myall, CEO of Neos Networks, said “Our altnet partners have been very clear about some of the structural challenges that deter competition and limit private investment in key regions. As an example, they’ve highlighted a tactic whereby Openreach announces FTTP expansion plans for specific areas without firm deployment timelines.

“This strategy discourages altnets and investors from committing to those areas, as they fear being undercut by Openreach’s rollout at a later stage. And, in many cases, Openreach has then delayed or deprioritised those announced deployments.”

Altnets fight back

But altnets aren’t just sitting back. Their top priority is keeping customers happy (56%), improving their networks (44%), and offering more services (43%). They know offering better customer service than the incumbents isn’t enough anymore.   

Teaming up seems to be a big part of the plan. Over half (52%) are looking at partnerships to get more customers faster, and 43% want to reach new areas this way. Digging new fibre everywhere just doesn’t make sense now, so joining forces with others is a smarter bet.

Working with big names like Sky or TalkTalk (planned by 56%) or wholesale network providers (48%) are popular ideas. We’ve already seen CityFibre and TalkTalk make this work. Surprisingly, fewer (36%) plan to partner with other altnets—perhaps because there just isn’t room for everyone to hit that magic 35% customer take-up needed to make money.

It’s not just about getting bigger; it’s about getting smarter. Altnets want to offer more than just broadband to boost their income.

Smart home gadgets (46%), business connections (43%), and security systems (42%) are among the extra services altnets are looking at to differentiate. London’s Community Fibre is already doing this, bundling TV and security with broadband, and saw its customer numbers jump 85% last year.   

Using fancy tech helps them stand out, too. Over half (53%) are using newer technologies (e.g. SDN and NFV) that make them more flexible and efficient than the old guard stuck with legacy systems. They’re also investing in things like private networks, 5G connections, and AI to improve service.

To survive and thrive, altnets need to be nimble—making smart partnerships, offering more services, using the latest tech, and never forgetting the customer focus that got them here. The moves they make now will shape UK internet access for years to come.

See also: DEFRA signs BT contract to use EE for real-time environment data

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