Davids vs Goliath: Why the future of fibre belongs to AltNets

 

In March 2021, the UK Government launched Project Gigabit, a £5bn infrastructure project that aims to equip more than one million hard-to-reach homes and businesses with gigabit broadband. In doing so, it opened the doors to thousands of alternative networks (AltNets) to get ahead in the UK’s broadband market – enabling them to take on the mainstream broadband providers BT and Virgin Media. What happened next could change the face of the telecoms industry forever.

Make no mistake, the AltNet landscape is growing, and fast. A recent report from the Independent Networks Cooperative Association (INCA), suggests that AltNets will invest around £12bn in full-fibre connectivity before the end of 2025, assisting the UK Government’s broadband target.

A David vs Goliath predicament

Despite this, the sector still faces somewhat of a David vs Goliath predicament, albeit with a lot more Davids! Even when hundreds or thousands-strong, the AltNet landscape faces the challenge of taking down two of the biggest and most established telecoms suppliers in the country. The competition could go one of several ways: a large number could consolidate to create larger, independent networks, some may be acquired by the big two, and many will ultimately not be large enough to compete.

For many of these AltNet businesses, the ability to compete with Goliath is dependent on their business model. Many operate a ‘reverse model’ to the big two. For instance, it is typical for AltNets to identify locations for gigabit ahead of understanding the cost of implementing broadband services, whereas the big two have always provisioned the cables first, ahead of attracting customers. This enables AltNets to better manage their costs, operating a leaner economic model.

However, AltNets still face several challenges. They are entering a market that is continually consolidating, they’re up against aggressive wholesale pricing set by the big two, they have limited access to land rights and struggle to attract skilled labour in a sector facing a nationwide skills shortage. In many cases, securing locations for fibre is only part of the challenge – installing said services can be more challenging.

Cooperation to connect the nation

One way that AltNets can gain a competitive advantage and increase their chances of success is by partnering with the right ecosystem of suppliers. Since many AltNets specialise in fibre-to-the-premises (FTTP) broadband, access to a rapid and effective rack and cabinet designer and installer is essential for getting these services off the ground. Furthermore, since the big two providers have already laid much of the infrastructure for fibre, this can be built around these foundations, using connections available through the right data centre partner.

This is where CHH CoNeX is becoming a key strategic partner to AltNets. Through our broad spectrum of telecommunications solutions and active cabinet integration, we aid in the engineering design of data cabinets, with quick and effective installation and managed services, taking care of rack assembly, pre-staging, loom pre-wiring, full product integration, testing, asset tracking and more. The ability to source all these services from a single supplier with a proven track record and capability, helps AltNets achieve rapid and agile time to market, keeping them competitive.

There’s no doubt that the race is on to satisfy the UK’s need and desire for ultra-fast broadband, with the UK spearheading one of the quickest rollouts in Europe.  Project Gigabit gives a major advantage to AltNets, helping to inject investment into these businesses and increase their market presence. However, if AltNets are to truly challenge the big two and win over new customers, it is essential that they build networks and value chain partnerships that are strong enough to deliver on their broadband promises.