Openreach MD Calls for Softer Ofcom Regulation in Competitive UK Areas
The Managing Director of Regulation at UK broadband operator Openreach (BT), Mark Shurmer, has called on Ofcom to ensure that they soften market regulation on them in areas of the UK deemed to be competitive due to the presence of either Virgin Media’s fixed broadband network or those where there are three or more full fibre (FTTP) network providers present.
At present Openreach is already deemed by Ofcom to hold Significant Market Power (SMP) in a number of the UK’s markets and thus faces a variety of rules to address the competition concerns that arise as a result. This includes various price controls, the need to ensure fair access for rivals to run new fibre via their existing cable ducts / poles (PIA), Dark Fibre Access (DFA), restrictions on broadband discounts and Quality of Service (QoS) standards etc.
The regulator recognises that some areas are more competitive than others, and so scales their rules by geography. For example, areas where competition is deemed to be sufficiently well-established or effective (Area 1) will benefit Openreach through the removal of regulation (the regulator did not to identify any such areas at their last review), while partially competitive areas (Area 2 – 70% of the UK) see softer regulation and uncompetitive areas (Area 3 – 30%) – where only Openreach is present – see the toughest rules.
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However, earlier this year Ofcom began their Telecoms Access Review 2026 (TAR), which is a wide-ranging market study – conducted every 5-years – that is looking to make changes that “promote competition and investment” in gigabit broadband and business connectivity. But such things are always easier said than done, with vested interests frequently clashing between different players.
One of the issues to arise from this surround the debate over how Ofcom defines competition between different areas. Once again the new review, perhaps somewhat surprisingly, chose not to define any areas “where competition is sufficiently well-established or effective” (Area 1). But it did propose to redefine Area 2 to reflect 90% of the UK (up from 70%) and Area 3 to reflect 10% (down from 30%).
The changes reflect today’s fluid market, where in many areas Openreach now faces competition from more than just Virgin Media (inc. nexfibre), including a wide mix of alternative networks (Summary of UK Full Fibre Builds). But the likes of CityFibre, Netomnia, CommunityFibre, Hyperoptic, FullFibre and Gigaclear have had some of the biggest impacts. On the flip side, many altnets are today suffering a slowdown or even stall due to the strained economic climate (i.e. high interest rates, rising build costs and competition etc.).
Despite this, Openreach’s Mark Shurmer told the FT (paywall) that restrictions on them should be loosened by Ofcom in areas where there were three alternative providers, or in places where Virgin Media was present. Ofcom said in March 2025 that competition in the sector would “take time to become sustainable”, but Shurmer disagrees. “You’re talking about Virgin Media O2, a well-established operator, or CityFibre, funded by [Abu Dhabi] sovereign wealth fund [Mubadala] and Goldman Sachs,” he said.
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The pain points fuelling Shurmer’s position are easy to see. As noted in our H1 2025 Broadband Coverage report, altnets were found to have covered 42.26% of the UK with FTTP broadband by the end of H1 2025 (up from 39.38% in H2 2024). At the same time, Openreach’s most recent quarterly results noted that broadband line losses to rivals had hit 169k (albeit down from 243k in the prior quarter). The caveat here is that most of their line losses come from areas where they’ve yet to deploy FTTP, thus any suggestion of scaling back their roll-out may carry other risks.
Shurmer thus warns that Openreach may struggle to meet its provisional target of covering 30 million homes with full fibre broadband by 2030 if Ofcom sticks with existing measures. On the flip side, altnets argue that competition is still in the process of being established, and some are also unhappy about the revised definitions for Area 2 and 3.
For example, Gigaclear recently warned Ofcom that Area 3 is now “far too small” (here) and highlighted how “just because an altnet has built it, doesn’t immediately make it commercially viable for two operators“. As usual, everybody is fighting from their own corners of vested interest and the regulator has the difficult task of finding a balance.
In the end, both sides make valid points, but excluding Virgin Media (inc. nexfibre), competition in the UK’s full fibre market is still a patchwork of smaller players that is in the slow process of consolidating itself toward a hopefully more cohesive and effective structure for the future.
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The problem with any transitional market is that we can’t yet see for certain exactly where it will end up, which does at least suggest that Ofcom must be very careful not to upset the apple cart too much this time around (bigger changes may have to wait until 2031). The regulator is due to set out their final proposals for TAR 2026 in the very near future.
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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A lot might have changed in the last five years, but I do wonder just how far OFCOM will drill down on a local area to define an area. If half of a particular town has, say, OR, Virgin AND an AltNet, but half only has OR and Virgin, will they define it on individual postcodes?
They use postcode sectors (e.g. SW1A 1), where in the UK there is approximately 12,500 postcode sectors, 11,000 of which are included in Ofcom’s analysis
OFCOM are showing VM/Nexfibre as a player with SMP by now surely? I think VM themselves were just under the limit (probably intentionally) before, but they should class VM+NF as one entity for this by now?
Like if the area has VM, make it area 2, if it’s just an altnet do not, unless its multiple? surely that satisfies everyone except VMo2 – which is fine, they’ve got the coverage and are currently seemingly not having to deal with any of the additional regulation BT has to deal with. (Unless I’m mistaken)
I’m surprised Openreach are being laid back in suggesting that there needs to be three different altnets. I’d argue one or two is enough and would cover a much larger swathe of the country. Arguably it should be the OR monopolies, places that will never get an altnet, that remain highly regulated.
Or perhaps it should be time bound and depending on who was there first. If OR come in after an altnet then they get x years with OR still handcuffed to have some hope of building a customer base.
Like others I’d hope Ofcom sees through the Nexfibre farce and treats them as part of VM’s overall footprint. Seems reasonable when they’re using VM branded parts in installs, VMO2 brands being the anchor tenant and sole wholesale customer, and Liberty Global appear to be doing the heavy lifting on ONT procurement for said wholesale product.
My thoughts about VM/Nexfibre entirely.
The longer Ofcom shields Altnets from competition and standing on their own two feet, the longer the Altnets will maintain poor business plans.
“Shurmer thus warns that Openreach may struggle to meet its provisional target of covering 30 million homes with full fibre broadband by 2030 if Ofcom sticks with existing measures”. Sorry, but the threat of rivals eating your lunch should be driving you on to your target. I’m more sympathetic than many towards Openreach but there’s no doubt that they have a farmer like tendency to moan in all weathers, even though they’re outpacing their rivals in terms of premises passed, build rate and take up.
Surely that depends? if they’re at a disadvantage on pricing for example in an area, why would they deploy to somewhere that maybe has 2 altnets already but no BT FTTP? It makes the commercial viability questionable, especially if the altnet(s) have decent takeup in that location.
They need to make a ROI too, I get people treat them like BT owe them something but it’s still a private company with the intention of making money.
But if there’s 2 altnets already, does it need Openreach as well? As long as there is a choice of networks does Openreach need to be there?
You’re taking this too literally. What he means is that if OR can’t make enough money from their existing network, they won’t have the cash to roll-out to marginal areas. Those marginal areas may or may not have existing FTTP.
@BG – so all the customers of Openreach ISPs would have to change if they want full fibre?
oh dear! Openreach dont like competition, then! Its about time the Mergers and Monopolies Commission broke up Openreach and BT as main market operator trying to control the broadband and phone markets.
Mergers and Monopolies Commission! What is this, the 1980s?
Wake up Eric!
The MMC was, literally, decommissioned on 31st March 1999.
You’ll be wanting the Competition and Markets Authority (CMA) these days.
Not a totally toothless tiger, but seems to have chronic periodontal disease, if the Vodafone/Three merger is anything to go by.
To be accurate, it was the Monopolies and Mergers Commission, back then. Replaced by the Competition Commission on the 1/4/1999.
It shows again with ofcom policies its not about consumers because how is restricting openreach on so many levels better for consumers it’s not look at the pricing providers on openreach network have to charge over the alt nets a fair system would be they are allowed to be close within a %.
Ofcom has always been anti openreach and let others get away with things VM are prime example.
Like all bureaucrats, Ofcom would find it almost impossible to withdraw regulations without adding to the rulebook. Perhaps the CMA should instead be involved in assessing what classification should be applied to local markets across the UK.
It is Ofcom’s interference in the market and its unbalanced regulation of BT for more than twenty years which has been a significant contributory factor sorry mess the market is in today.
There’s nothing especially onerous about the regulation of BT. Had they not wanted infrastructure competition they could’ve built dark fibre. They chose to go active with FTTC and they chose to remain active by deploying PON and providing Ethernet handoff. Competitive networks are the inevitable result of BT not wanting to deploy point to point because they’d have to unbundle it.
Had they been protected from infrastructure competition they’d have been forced to spin Openreach off.
We’ve had a rush that’s gone over the top however altnets were inevitable once conditions were right the moment Openreach released GEA. They chose this, no-one else.
@Polish Poler:
“There’s nothing especially onerous about the regulation of BT.”
That is clearly not true. Ofcom’s regulatory actions have distorted the market by focusing almost entirely on containing BT. Their objectives regarding the development of wider competition amongst the major players are based on wishful thinking while hobbling the development of the key national player. As a consequence, the major players have not developed their own national networks over the past quarter-century, and BT is now left a minnow at risk of acquisition by a foreign conglomerate.
Further, the mess within the AltNets is entirely due to the failure of successive governments and Ofcom to regulate the sector to ensure the long term viability of the offerings alongside the growth of the gigabit services. This has been utterly naive.
@Polish Poler:
The reasoning behind the spin-off and the separation of Openreach from BT is based on flawed premises. That has led to a distortion of the market and the virtual elimination of any incentive for other major players to invest in their own networks over the last 25 years or more.
I’m reminded of the famous quote by Mandy Rice-Davies.
Well you would be, wouldn’t you? LOL
Ofcom cannot continue to argue that OR have a SMP now we have the FTTP coverage and VM HFC conversion underway. I would recon BT could challenge it legally soon as unfair manipulation. If Altnets cannot get the market share with a symmetrical offering and 20% price difference (source ZEN) then they need to take a hard look at themselves.
Altnets need to pay more for PIA as copper withdraws. The duct routes, boxes, poles, manhholes and covers need to be maintained.
VM should be forced to open up their ducts particularly in OR directly buried areas to assist Altnets.
Ofcom should focus on premises that are being missed either due to cost, simply left out or missed by mistake. I am not talking rural BDUK I am talking about urban where the Altnet just left and their return is unlikely. My view is that if a provider has the largest market share in a location they should have a USO obligation.
They should also consider that regulation should even handed and that includes local monopolies (who ever they are) particularly where there is restrictive practices.
Lets be clear here; multiple networks in your street mean all of them will be under utilised to varying degrees. That wasted investment will be picked up by us in the prices we pay.
Nope they absolutely can claim Openreach have SMP under the criteria here: https://www.ofcom.org.uk/phones-and-broadband/telecoms-infrastructure/smp-guidelines
Altnets do not need to pay more for PIA as copper is withdrawn, Openreach would be maintaining that plant with or without altnets and the price of PIA is cost+ which is independent of copper.
VM opening up their ducts seems a good idea.
There is no USO at all on full fibre so there’s nothing to place on altnets.
Regulation is not there to be applied equally to everyone. It’s not intended to be fair or unfair on any particular company as illustrated by that everyone doesn’t have to do PIA and the USO falls on BT.
https://www.ofcom.org.uk/siteassets/resources/documents/consultations/uncategorised/8767-annual_plan2005/summary/ch2.pdf?v=332242
Multiple networks in a street are not by definition underutilised. We’ve infrastructure competition in the UK as it’s the only way to really differentiate and those networks are not built with 100% utilisation an expected result bar those monopoly areas locking competition out: they should be dealt with.
Had Openreach not wanted this overbuild they could’ve built point to point fibre with 2 or 4 dark fibres to each property. It was their choice to have networks you call ‘underutilised’ when they chose to sell bitstream services via active network.
Perhaps it would be better if all physical infrastructure was separated off and placed in the hands of a single regulated entity (obviously paying current owners a fair price) and then leased to all operators who wished to use it. If any network needed to build further infrastructure then this would also be paid for and adopted by said infrastructure company. It could also make it more viable to place infrastructure underground if more operators were using it and save multiple companies digging the same streets.
@Polish Poler:
The Ofcom guidelines for Significant Market Power are no longer applicable to the current UK market on the majority of the indicators that Ofcom has defined.
@Polish Poler: A lack of obligations on all network providers regarding access and service is the dog that did not bark in the night.
@Poish Poler:
“Regulation is not there to be applied equally to everyone. It’s not intended to be fair or unfair on any particular company”
Ofcom’s regulation of Openreach and BT is unbalanced and it is not achieving its objectives. Ofcom is suffering from bureaucratic self-interest in not recognising this.
I wish we could go back to just Openreach and Virgin as all these altnets are creating localised monopolies with some only having copper and one altnet, and others having 5 or 6 altnets. I would hate to be in an area with only one altnet.
Likely Openreach will build there at some point. The alternative for now is no full fibre at all as no-one else finds the build viable or has scheduled it. Either way no-one has lost out, they have the copper they would have anyway and a fibre option, the altnet aren’t stopping Openreach from building there and they almost certainly will.
When it was just those 2, Openreach’s plan was G.Fast, and even with just that only in very limited areas, be careful what you wish for.
A lot of consolidation/Altnet failures to get down to ten providers, let alone three out of a few hundred. This may take a while to play out, depending on the economic conditions as time passes, and the willingness of the Altnet backers continuing to do so.
The FT article is at https://archive.is/kA4T6 for the curious.
Those headlines were invented by the FT. BT did not make such a claim nor use that wording.
Clearly, the Ofcom regulatory regime is out of date and does not reflect the current market conditions nor even start to address the issues that will arise over the next regulatory period.
Here we go. Only reason BT want to favour themselves more, is to kill any chance of growing competition. It scares the life out of them that Netomnia, with 50PON already in their network, and having to consider symmetric offerings. They really do NOT want to do the latter, and just making it look like they are with alleged offerings coming up with carved out speed tiers to make upload tiers expensive (most ALTNETs just do same download and upload speeds, not tiers of upload speeds at different prices). Once ALTNETS out of the way, they will cancel those upload tiers citing no demand for them.
The usual threat from the dinosaur of “we can’t meet roll out by 2030 unless we get our own way”. OK, lets make it a bit easier for ALTNETS then instead! They came and gave the boot to BT when BT wanted to sweat FTTC copper, then BT panicked into action with roll out of FTTP, albeit a legacy out of date GPON technology.
Now, not a defender of VM as they have dubious operating practices in my experience, but their network was self funded from scratch, and not bought cheaply from the tax payer.
I don’t disagree that the altnets got Openreach into gear, though OR have always been the largest FTTP operator in this country.
I do very much doubt that Netomnia is causing concerns at One Braham. If you asked anyone there they’d probably wonder if it was a type of plant. Of course, the usual things need to be said. Largest footprint, fastest build, market leading takeup. All words that will never be said at an altnet HQ.
“network was self funded from scratch, and not bought cheaply from the tax payer.”
Virgin’s predecessors benefited from exclusive regional franchises and BT sufficiently restricted in what it could do to compete. They had plenty of government assistance.
Altnets receive subsidies today, as they compete for Openreach for BDUK and successor programmes.
The taxpayer received market rate for the assets that existed in 1984, and we’ve had 40 years of private sector investment, upgrades and infrastructure added to locations that didn’t exist back then. At what point does this argument disappear?
“but their networks were self funded from scratch, and not bought cheaply from the tax payer”
Oh, so BT should’ve filed for bankruptcy and robbed private investors of billions of pounds instead?
http://news.bbc.co.uk/1/hi/business/1975874.stm
Perhaps BT should have invested more quickly rather than trying to sweat copper. They only did fttp in the end because it was game over if they didn’t because the rose smelling Altnets appeared.
NTL merged with take west in the end and payed Branson a lot of money for the Virgin Media brand. Government intervention happened because they needed another major supplier for telecoms to prevent a monopoly by BT which had just got a load of infrastructure cheap as chips, compared to if they started from scratch like an Altnet has to, or back in the 80s, lots of regional cable companies. NTL was later on.
As you know BT wanted to install FTTP many years ago but were prevented by the government who would not permit video down it to protect the cable TV companies. All seems very strange now.
@The Facts: “As you know BT wanted to install FTTP many years ago but were prevented by the government who would not permit video down it to protect the cable TV companies. All seems very strange now.”
Stop posting half truths here. Nobody has stopped BT from deploying fibre for at least 15 years, there is no need to dig up an outdated story here.
Telewest not Take West, frigging auto correct 😉