CEO of Rural Broadband ISP Gigaclear Warns Ofcom Has Gone Too Far
The CEO of Abingdon-based alternative rural broadband ISP Gigaclear, Nathan Rundle, has told Richard Tang, CEO of Zen Internet, that they’re still focused on extending their full fibre (FTTP) network to 1 million UK homes in ultra rural areas. But the provider is concerned about Ofcom’s proposed changes to the market getting in the way.
The new interview reveals that Gigaclear’s gigabit-capable broadband network now covers 600,000 premises (up from 593k in March 2025) – mostly in remote rural parts of England (only about 15% of their network is in market towns) – and is also home to a customer base of 150,000 (up from 140k). This reflects a respectable penetration rate of 25% and Nathan said they’re aiming to reach around 29% by the end of this financial year.
The operator previously held an ambition to cover “over” 1 million UK premises by 2027, but last year’s job cuts – impacting their commercial build teams – may well have hit that (here). This came as part of “planning for the next stage of its development” and a “re-focus on ultra-rural areas“. Gigaclear is reportedly now on the hunt for fresh funding to continue their full fibre deployments (here), but in the meantime they’re more focused on commercialisation.
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“We’ve definitely been refocusing our build to go ultra-rural, which means the deployment is slower than it was, and we’re using a lot more BDUK [public] money, while being really clear around those investment cases. I think the current funding climate, as every altnet knows, is tough and ultimately deploying large amounts of capital at the moment isn’t necessarily a logical thing to do,” said Nathan.
Nathan added that they’re “kind of open” about how they get to 1 million homes, whether that’s through working in partnership and consolidation with others or all new build. Gigaclear’s Board is currently “working through” this very question at the moment in order to “understand what is the best way” to reach a million, while at the same time also expecting to go EBITDA positive this year.
The ability to achieve a positive EBITDA (i.e. earnings before interest, taxes, depreciation, and amortization) usually indicates that a company’s core operations are becoming profitable, albeit still with a long way to go. “EBITDA positivity is a really important first step. We’ve got a plan for getting us through to being profitable and cash generating, which is obviously critical for our lenders and investors. So we are on that path, we are on plan, we know exactly what we need to do,” enthused Nathan.
In terms of the timescale involved in achieving that positive outcome, Nathan said that “in the next 3-5 years we should be in a good position“, albeit without being too specific.
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Defining the Competition
Richard’s interview soon identified that one of the potential challenges to the above ambition could come from Ofcom’s new Telecoms Access Review 2026 (TAR). In particular, Gigaclear raised concern over Ofcom’s plan to change the definition for which parts of the UK are deemed competitive or not, which is important as it influences how much regulation is applied to Openreach (BT) as the market incumbent. At the last review, back in 2021, the regulator defined Area 3 (non-competitive areas) as covering about 30% of the UK, which is typically Gigaclear’s area of focus.
However, gigabit-capable broadband today already covers 86% of UK premises, with Ofcom forecasting that this will reach 97-98% by May 2027 (here). Suffice to say that the regulator’s new TAR is somewhat logically proposing to shrink Area 3 from 30% to 10% of UK premises, but that has Gigaclear worried.
“Not sure I would agree with their new definition of area 3. I think the old definition of area 3 was too wide and included far too many market towns. But I think beginning to look at how do we get an approach to infrastructure that gets the delivery of this critical service into these communities as quickly as possible could potentially mean there needs to be further collaboration between ourselves, the incumbent, and some of the other players in the market to try and get that standardised approach,” said Nathan.
Instead Gigaclear are pushing for “sensible regulation around area 3” in order to avoid it having an “impact on [their] future investment“. Nathan said he would prefer Ofcom to “make no significant changes” and warns that area 3 has now been made “far too small“.
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Nathan added that they’re now “petitioning [the regulator] quite hard around the fact that just because an altnet has built it, doesn’t immediately make it commercially viable for two operators.” Naturally, there’s an element of vested interest here, but Nathan does make a fair point.
Wholesale and Retail Pricing
Toward the end of the new interview, which you can watch in full below (this touches on many other areas), Nathan also hints at Gigaclear’s future plan to explore “more wholesale partnerships” and the need to produce a “credible wholesale offering” in order to attract more broadband ISPs to their network.
Gigaclear is currently a vertically integrated operator (i.e. it both runs the network and sells services over it at retail), which for rivals can be perceived as a conflict of interest. Short of becoming a wholesale-only network, like CityFibre, this one can be a difficult problem to overcome, with the proof being in how many established and reputable ISPs they can ultimately onboard.
Finally, the interview briefly turned a bit spicy as Richard highlighted how Gigaclear’s standard out-of-contract prices can sometimes be significantly higher than their first term discounted rate, which is something we’ve noted before (e.g. Richard pointed to the example of how, at the time, they were offering their gigabit package for £29 per month, but post-contract it shoots up to £85). Richard noted how this change wasn’t always well signposted for new customers (a common problem in the wider market, not only at Gigaclear).
“We’re really clear with the list price. We contact all of our customers all the time before they go on to that list price, to give them the opportunity to re-contract. If a customer gets the bill shock, normally they phone us straight away and we’ll immediately look to re-contract them and find a better deal for them,” responded Nathan. He also noted how there is only a “small percentage paying list price“.
Richard then pressed Nathan on how much the re-contracting price, roughly, for that same tier would be, but Nathan avoided giving a clear figure: “What we try to do is look for different ways to create value for the customer, to try and settle on a different price, that might be upgrading their smart wifi, it could be a voice package as well. We’ve got a team of specialists that will sit down and talk to the customer, understand their needs, and do the best price we can for them … it’s down to the ISPs to make sure that they get that balance right and don’t take advantage.”
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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Nathan is right…makes a change but he is 100% spot on here. Openreach have a unfair ability to deliver at speed due to the limited constraints on cash deployment unlike the Altnets. Gigaclear has made a sensible move focusing on ultra rural prems that have no other coverage (excluding copper) but there has to be a reward for that capital expenditure and in my opinion that should be the prevention of overbuild from the incumbent.
Whilst Gigaclear has clearly had to make some tough decisions over its speed of deployment and size of operation, it seems well placed to be the strategic rural player that can work with Openreach to finish the final 10%. It makes no logical sense for OR to overbuild in that area. It would make far greater sense to create a wholesale agreement where BT sells its consumer product to homes outside of its own footprint but allow Gigaclear to compete against OR in areas where there is a shared footprint. Both businesses would benefit and BT wouldn’t have to shell out millions of pounds to protect a tiny fraction of their customer base.
Or prevention of overbuild by any other supplier? Unlikely the government could or would do that.
BT has been deliberately hobbled time and time again in order to “protect” the facade of competition in this sector, and it has never been to the benefit of all customers.
I lived in an area that never got cable TV and took forever to get its first LLU operator at the local exchange. How did I benefit from BT cancelling its 80s fibre rollout & artificially inflated pricing on BT Wholesale DSL services in an attempt to make these non-existent alternatives more “attractive”?
This area now has a taxpayer subsidised altnet (tremendous overlap with Openreach FTTP – let’s hope the overbuild is not part of the subsidised area!) that offers objectively inferior service and no wholesale choice. I would be outraged if OR were to be banned from infill and providing their superior infrastructure.
If Openreach wants to build, then they should be allowed to build. Gigaclear and co will have to work out how to compete. That is the (still rather one sided) free market at work. It is already utterly farcical that these operators will more than likely use OR’s physical assets and can undercut them on price without OR being allowed to meaningfully respond.
What are you thinking that BT would be protecting — the BT retail customer base or the Openreach wholesale customer base?
found the gigaclear employee
The government has no say in where companies decide to invest. the failed bduk experiment only slowed the rollout as companies decide to take cash to build remote areas rather than rolling out to more dense areas. People win with more competition which means lower prices. Especially when gigaclear has no ISP choice
If it wasn’t for competition then companies would all be charging more than 40 quid for basic tier
The is nothing unfair about BT’s ability to fund the roll-out of full-fibre. If you had not noticed, BT has been selling assets to raise funds, and its debt increased by over GBP 1bn last year.
Meanwhile, AltNets understood the challenges when they entered their particular segments of the market.
@john bit of an odd take. Deployment in rural areas would never have happened without BDUk because BT wouldn’t ever commit to upgrades unless they were helped by the government. The only other established provider (virgin) would have just laughed at the government.
Was it perfect 100% not but villages like mine would never have got fast internet and BT only upgrade parts of the village (100 properties) when an alt net arrived and even then it’s only 75% until next year.
@Ivor “It is already utterly farcical”
It’s not farcical at all. Openreach is a powerful monopolist. Free markets breakdown when monopolies are allowed to exist and that’s why we have so many laws to prevent them and break them. Unless Openreach falls below 25% market share (the current definition of having monopoly power) it’s always going to face some level of regulatory restriction. If OR were allowed to do whatever it wants it could easily crush all the competition through it’s capital might. Obviously at its current market share of 75% it is a huge threat to the emergent free market in full fibre and the restrictions are consequently at their most severe. The reality is Openreach is probably always going to have monopoly power but as its market share falls so will the restrictions on its operations.
I don’t think preventing overbuild is likely or fair however it’s a interesting comment.
A real challenge, and I’ve seen this all over the country is that one altnet will go and build out to *everyone* in a (usually rural) area, sometimes with bduk money but often without. A few months later openreach come and ‘snag’ the cheapest 80% as low hanging fruit; anyone on a main road, anyone in a village and so on, but leaving the expensive 20%.
Openreach then convert most of that 80% coverage via deals with talktalk, sky, BT leaving the altnet with maybe 20% take-up.
That’s a really really bitter pill to swallow if they’ve done a 1K/prem build hoping for 40% take-up.
Openreach however still only have 80% coverage, so what about someone in that final 20% still using their FTTC line. Do they;
-Run the cabinet for 5 subscribers?
-Kick them off and force them to buy from the alt-net?
-Relent and build out, at a now massive cost?
-Buy off the altnet at a layer 1 level or similar?
All of those seem almost equally unlikely.
John – the fact that altnets exist goes against any “monopolist” talk. It’s bad enough that they get access to OR’s crown jewels at likely far less than market rate, but ultimately any company can get code powers and (literally) plough their own furrow. We aren’t the US where there’s all that red tape and telco/cable lobbyists trying to keep it that way.
The case for any special treatment of OR is slowly dissolving. The Sky/CF deal was a major step change, as now all of Openreach’s largest non-BT Group customers are also customers of altnets.
I can’t imagine it’ll be long before OR launches the case for equality. The question is whether the larger altnets are put under similar regulations as OR (especially in locations where they have taken a subsidy) or OR is permitted to engage in true competition.
Any altnet that didn’t have Openreach upgrading their own network as a “risk” in their business plan surely ought not to exist.
@Ivor, why are you such a BT fanboy? If you have shares in them, then yes I kind of understand you protecting your money, if you work for them, again, maybe protecting your job. If you are just a customer, then it is a bit strange.
I know what you will ask, why am I an alt net fanboy. I don’t like large companies taking advantage of their size and pushing smaller companies out, that is even true for the company I work for, certainly more so in the last few years.
I like competition, and having all the ISPs on one network run by a private company is not good, if the network was nationalised, then it would be a different thing.
I feel the same way with Sky and their TV service and the way they knocked smaller ones out, now they have more competition, sadly not enough in the sport viewing.
I choose Zzoomm because it was here, it is a better network than Openreach, it is not Openreach and the price was and still is good.
I did not want to go to fibre in the first place, you can blame Plusnet for pushing me off the Openreach network and into the clutches of a competitor.
How it will work out, I don’t know, at the moment, the service is good, I am on it now, so will stay with them unless they go belly up. Decided, and should have decided before, just to go with the flow.
Ivor – the dictionary definition of monopoloy is zero competition. However, under competition law monopoloy power exists at 25% market share and above. Right now Openreach has 75% market share, it’s so overwhelmingly dominant that there is zero chance it’s going to be allowed equality on a national basis. It’s best shot is to argue that geographic areas are their own market and, if, within a given geographic area, Openreach has say 30% to 40% market share another provider 30% to 40% then it may be deregulated in those specific areas but only if deregulation will not result in them becoming overwhelmingly dominant again. And yes if an altnet wins 25% market share it will start to come under the eye of the competition regulators as well although none is so far anywhere close to that.
@john: BT Group share of the broadband market (December 2024 figures) is 28pc.
The 75pc figure you are referring to is for the core network, but much of that is to be made redundant with the imminent switch-off. If other providers had invested in their own networks they would not have been so reliant on BT and there would be no need for much of Ofcom’s regulations.
Fara – Yes we are talking about Openreach and its monopoly power over infrastructure. I’m not aware of any notable restrictions on BT’s retail business.
@john:
“Yes we are talking about Openreach and its monopoly power over infrastructure”
No we are not; that is your narrative, which bears no resemblance to reality. BT Openreach was reported to have just over 28pc of the broadband market as of December 2024. It is certainly not a monopoly. BT has significant infrastructure, but a large chunk of that is the heriatge switched-circuit platform. Its infrastructure also services other markets not just broadband.
“I’m not aware of any notable restrictions on BT’s retail business.”
Ofcom imposes costs on BT through its regulation and BT is is also subject to the same reatil regulations as other providers.
So again; BT is not a monopoly.
This is a joke right ??. Rural areas have been waiting in vain, for decades for BT & Openreach to finally grace their presence with FTTP. BT it seems have resolutely refused to Upgrade these Rural areas. instead cherrypicking profitable Urban areas, to bolster their headline FTTP Installation figures. Openreach were given Billions to lay FTTP in this area of South Gloucestershire under the Fastershire program, they failed miserably, seemingly pocketing the money and doing nothing. Gigaclea, by comparision, have blanketed the area with FTTP connections. Reaching even the most rural areas. The comparison is night & day…
Connecting Devon and Somerset. No competition there and they failed to deliver their commitment. Give me a break.
Funny how Nathan goes on about how he loves BDUK, but then failed to deliver FTTP to a large part of Devon about 10 years ago with them, meaning we had to wait a further 5 years or so for FTTP to arrive from another ISP!
You are lucky that you got fttp in the end. My area has now had two Project Gigabit contracts awarded by BDUK that have failed to deliver: first by Gigaclear in 2017, who finally descoped us in 2021; and now by FullFibre Ltd/Fibre Heroes (awarded April 2024), who pulled out just about a fortnight ago. The BDUK are not fit for purpose IMHO. Contract bids are obviously not being scrutinised well enough. It’s the false hope that kills you.
I would have hoped that Ofcam would have planned for changes around IoT connectivity to help boost FTTP roll-out. Just think of all those IoT devices out there (approximately five times as many as other entities) that would benefit from stable connectivity rather than being reliant on wireless. It would certainly help address issues around some SMART Metres and be a factor in driving full FTTP/B coverage.
Regarding consolidation: After getting over the hump digesting Three and possibly after the full buy-out of CK hutch’s involvement, Vodafone might me interested in buying one of the bigger AltNets to fill-out its own core network.
i hope not and if they try, it should not be allowed, Vodafone is far too big as it is, that is the problem with this country, we pander to large companies who just want to make money for their shareholders and give their CEO large pay rises.
I have no problem with companies making money, but when one large supermarket chain made over a billion pounds and then say it is difficult times, and we did not make enough and then give their CEO a huge pay rise, it just shows the greed that is around.
@ Ad47uk: Vodafone is now the largest mobile operator in the UK, but its fixed link coverage is not on a par with its two main competitors. Finding the right acquisition partner will help boost fixed-link competition amongst the big three.
In terms of the profitability of the providers, the break-even point for the UK in terms of take-up is probably in the region of 40pc to 45pc (it will vary for each provider based on their costs under a sustainable business model). If that is in the right ball-park, then I think NONE of the full fibre providers – including BT Openreach – has yet achieved break-even.
Break even point depends on the cost per premises passed. Openreach & Netomnia for example are currently running at less than £300 ppp, indeed Jeremy Chelot reckoned he could break even at 13% take up. If like Gigaclear your average cost is over £1000 ppp then you either need to extract more money from each customer or have a greater take up or get subsidised. One advantage Openreach does have is they are still getting income from the legacy copper network while they carry out their build.
@Big-Dave: Thanks.
I do not know the aggregate costs per connection for all the providers. However, in order to establish a sustainable model, each provider must also take into account the non-delivery costs, including debt and financing of the business. Bain estimated that the worldwide threshold is at about 35%, but for the UK, I am of the opinion, and some of the providers seem to be gravitating towards similar figures, is somewhere between 40pc and 45pc. Claims for lower thresholds are likely based on a non-sustainable business model, such as “consumer acquisition” mode, but are highly unlikely for a sustainable business.
@Big-Dave: P.S. It is take-up that is being used as the key indicator of the viability of these businesses.
@Ivor
“This area now has a taxpayer subsidised altnet (tremendous overlap with Openreach FTTP – let’s hope the overbuild is not part of the subsidised area!)”
Don’t get your hopes up. North Newington near me is being installed by Gigaclear under BDUK despite the fact that it appears to have already been covered by Openreach’s commercial build.
To be fair, this is on Openreach. They played ‘chicken’ with bduk and lost.
The game was to say ‘oh no we’re not covering any of those prems commercially’ in the OMR so that they could then put in a bid and win subsidy for premises that would’ve been commercial. I said this at the time dating back to the original FTTC procurements and everyone said it couldn’t be proved but they had similar “concerns”.
Now the proof is plain for all to see, as soon as another provider has won a bduk lot all of a sudden they’re going round covering premises they said they needed subsidy for 6 months prior.
@-:
BT picked up many of BDUK contracts that the AltNets were not capable of delivering.
Seems mad altnets don’t share each others infra. Befibre wanted to put an extra fiber up in addition to the one I already have for gigaclear. These companies must be wasting loads of resources. Surely all that needs to technically happen when you switch fttp provider is a reprogram of the sfp and patch onto their network. I know OR and altnets use different connectors at the pole but these are design decisions.
The reason they don’t share infrastructure is because they’re all playing the consolidation game. The objective is to be bought out at some point- a point at which you’ve got good coverage and minimal overlap. I.e you’re the only player in that town. Sharing infrastructure means that many parties wouldn’t have any assets, other than their resale brand. This is not an attractive offering, as there’s no benefit when it comes to consolidation and a buy out. The aim is to have as many properties passed and ready for service with as little overlap as possible.
Seems mad altnets don’t share each others infra.
Are you sure, because I got a look inside the altnet large cabinet feeding Dankshire town, with at least 16 rack points, and two were marked BT.
I queried this with the person doing the installation, and they said the alt-net had a Quid pro quo agreement to share bits on the infrastructure.
@DFD – The 2 marked BT could be the main link to the big world.
Would the space for “BT” not be for some sort of Openreach ethernet circuit? Not PIA, not infrastructure sharing, just a simple leased line on standard terms. No different to those feeding any cell sites in the area, for example.
Openreach has no reason to share with anyone beyond what the regulator forces them to do, and I doubt that will ever change.
Gigaclear came to my home village with plans to provide access to their service to every property in the parish. Did the roll-out to the village core but didn’t bother with doing the difficult and outlying parts of the village even when they had waiting customers.
Sorry but in my opinion all the AltNets do is cherry pick for an easy return and the rest have to rely on BT/OR.
Openreach does the same thing, where my partner lives, Openreach said they were going to lay fibre out there, they stopped 10 miles away, not enough houses to make it worthwhile.
Thanks to Gigaclear she has fibre.
They are all in it for the money, it has to pay, or they need to get6 money somehow for doing it. none of them are any different in this respect.
This is why support is needed in some places, but certainly not where there is over build.
@The Facts says
The 2 marked BT could be the main link to the big world.
I don’t think so as the alt-net laid a new fibre run, from NearbyDankshireTown, where afaik another organisation has connectivity to the outside world. In fact they appeared to be blanking plates (and the new alt-net service was up and running).
Afaik OR is fed from YetAnotherDankshire town, in the opposite direction.
It most likely was a standardised rack layout with space for a BT backhaul circuit, but in your case not going to be populated if they are building their own backhaul.