Alternative UK Broadband Networks May Have to Hike Prices to Survive

The Senior UK Plus Analyst for Point Topic, Veronica Speiser, has reportedly warned that smaller alternative broadband networks may have to raise their average revenue per user (ARPU) to approximately £45 per month just to breakeven. But most altnets are currently said to have ARPU’s of between £25 and £35, while larger operators operate within a wider range of £30 to £50.

The amount that altnets charge for broadband can vary quite a bit between networks and their associated retail providers, but most of them have historically positioned their packages to undercut those of the larger and more incumbent networks (e.g. Openreach, Virgin Media etc.).

The strategy here is simple enough to understand – offer faster speeds for less and rapidly grow your customer base (this usually also comes alongside pledges not to hike prices mid-contract), which works particularly well in an environment where so many of the largest ISPs have adopted ugly mid-contract price hikes that are applied unfairly (i.e. the same flat £3-£5 monthly hikes get applied to those on both the cheapest and most expensive plans, disproportionately hurting those least able to afford them).

Furthermore, the evidence suggests that this strategy is helping. For example, between 2024 and 2025, Openreach reported approximately 860,000 net line losses, which is closely balanced by around 850,000 net additions by altnets over the same period. But it should be said that most of those line losses came from areas where Openreach had yet to deploy FTTP, and they’re building feverishly to tackle that (c.1m premises per quarter).

The catch, at least according to Veronica Speiser’s remarks to TechRadar, is that “the current pricing models are not fully sustainable for many ISPs … and they will need to be bringing this up to around £40 — £45 per month to keep up with its current high operating costs per subscriber.”

Analyst firm Enders Analysis underlined this at the end of 2025 by calculating that the UK’s largest alternative gigabit broadband networks (i.e. BT / Openreach challengers) collectively suffered losses of £1.5bn in 2024 (up from £1.304bn in 2023 and £755m in 2022) – driven by high interest rates and rising build costs.

The same report suggested that many altnets may never make a profit and, as we’ve recently seen, several operators have since seen lenders taking a haircut and investors losing money to help rebalance the ship (e.g. lenders taking control of Gigaclear (here) and G.Network emerging from administration “debt-free” (here)). But while those operators were quick to put a positive spin on things, losing money always causes some harm, such as to creditors/suppliers and investors/lenders (e.g. some parts of a supply chain can even end up going out of business due to unpaid bills etc.). Suffice to say, surviving carries a cost too, even if it may fall on the shoulders of others.

On the flip side this does make such networks more attractive, such as in terms of becoming consolidation targets (building greater scale is one way to help move altnets into more viable territory). But consolidation requires money too, not only in terms of the amount you pay for the network, but also in the cost of complex network integrations, and there’s not as much of that flowing around right now. In the end even bigger altnets that grow their scale still need to make money, which once again seems likely to put pressure on the prices we all pay for the service.

One size doesn’t fit all

The catch here is that not all networks are the same. For example, some altnets have significantly lower network build costs than others (e.g. Grain, Netomnia), which in turn means they can continue to be a bit more aggressive on pricing (or alternatively may be more tolerant of lower take-up). Some other commercial altnets (e.g. Wessex Internet) are also more rural centric and have maintained higher pricing to reflect their higher build costs, while still being able to grow take-up at a reasonable pace.

Suffice to say that there’s a lot of variation, which won’t be fully apparent from the average pricing suggestions being tabled above by Point Topic’s analyst. The figures provided by Point Topic also aren’t attached to any particular service level and prices do vary quite a bit by service speed etc. In addition, there can be other differences to consider, depending upon whether you’re looking purely at pricing at the retail ISP or wholesale level (wholesale is arguably more important for network sustainability, assuming the altnet actually offers such a solution).

Just for a bit more context. One of CityFibre’s Strategy Directors, Clayton Nash, recently gave a presentation (here) that indicated how their wholesale full fibre (FTTP) broadband products are up to around 40% cheaper than Openreach’s comparable products, which varies across the tiers. At speeds of 160Mbps, CityFibre is shown to be 24% cheaper, while at 1000Mbps it’s 37% and for Multi-Gigabit this falls back 25%.

The above will of course vary as both Openreach and CityFibre have been known to tweak their pricing, but it does at least give you a rough idea of how much room for future movement may exist. The reality here is that in order to maintain some competitive advantage as the market evolves, most altnets will probably continue to be a bit cheaper than the incumbents, but over time we may see that gap shrink as the market matures.

Such an outcome has of course long been expected as this is just how things usually work – offer a cheaper service at first to undercut the established players and then rationalise the pricing over time, raising it back toward a more sustainable level.

The challenge is in identifying how much is sustainable for any given network and when to adopt that, particularly with so many altnets already walking on unstable ground and being primarily now focused on commercialisation to grow take-up. Raise prices too high and customers may start leaving faster than you can add them (churn), but keep them too low and you undermine future sustainability.

The answer from every network to this problem will be different because they’re all in different places, albeit still sharing in some of the same wider economic strains.