{"id":33846,"date":"2023-05-17T00:01:41","date_gmt":"2023-05-16T23:01:41","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=33846"},"modified":"2023-05-17T08:23:59","modified_gmt":"2023-05-17T07:23:59","slug":"alternative-full-fibre-isps-cover-8-2-million-uk-premises-as-build-slows","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2023\/05\/alternative-full-fibre-isps-cover-8-2-million-uk-premises-as-build-slows.html","title":{"rendered":"Alternative Full Fibre ISPs Cover 8.2 Million UK Premises as Build Slows"},"content":{"rendered":"

The Independent Networks Co-operative Association<\/a> (INCA) and Point Topic<\/a> just published their 2023 report into the impact of alternative “full fibre<\/em>” (FTTP<\/a>\/B) gigabit broadband networks, which reveals that AltNets grew their UK cover by 50.18% in 2022 to top 8.22 million premises (up from 5.46m in 2021). But the rollout slowed.<\/p>\n

The figures above are lower than those stated in Ofcom<\/a>’s Connected Nations 2022 report (here<\/a>), which found that full fibre networks had passed over 12.4 million premises by September 2022 (42% of the UK). The difference stems from the fact that INCA’s report excludes Fibre-to-the-Premises<\/strong> (FTTP<\/a>) deployments from the two largest operators – Openreach<\/a> (BT<\/a>) and Virgin Media<\/a> (VMO2) – in order to focus on independent alternative networks like CityFibre<\/a>, Gigaclear<\/a>, Hyperoptic<\/a>, CommunityFibre<\/a> and many more (Summary of UK Full Fibre Builds<\/strong><\/a>).<\/p>\n

NOTE:<\/strong> Openreach<\/a> covers 10m premises with FTTP<\/a>, while KCOM<\/a> has 300,000+, and we don\u2019t have an exact figure for Virgin Media<\/a> (likely around 1.5m to 1.7m). All are extending.<\/div>\n

The new report<\/strong><\/a> finds that FTTP from AltNets now covers a total of 8.2m premises (ready for service), which they say is approximately 25% of all UK premises. Furthermore, some 2.3m of those were in places classed by Ofcom<\/a> as “Area 3<\/em>” (i.e. mostly harder to reach rural locations). Take-up also stands at a respectable 20% (1.5 million live connections), which is up from 18.78% last year – this is somewhat expected given the early stage of build and how much of it is occurring in competitive urban areas.<\/p>\n

However, it’s worth remembering that last year’s INCA report (here<\/a>) included a future forecast, which predicted that AltNets would be delivering coverage to 11.6m premises by the end of 2022. But the actual figure of 8.2m for that period has fallen a fair bit short. Similarly, the 50.18% growth in premises passed seen during 2022 compares poorly with the 111% recorded for 2021.<\/p>\n

The progress is still strong, but the above disparity reflects the challenge that AltNets currently face in converting their build ambitions into reality in the current market. At this point everybody has felt some strain due to a combination of issues, such as rising costs (build, leases etc.), aggressive competition from rivals (e.g. overbuild) and the related need to secure a viable level of take-up.<\/p>\n

The above issues have a tendency to dampen the appetite of investors, slow builds and put pressure on jobs (example<\/a>). As such, it’s worth taking this year’s forecast with a pinch of salt, since INCA are now predicting that AltNets will reach 14.23m premises by the end of 2023. However, if growth remains around 50%, then we think a figure of 12.3m is more likely, but there’s a chance it may slip further.<\/p>\n

\"inca-2023-gigabit-and-fttp-altnet-uk-coverage\"<\/p>\n

One other caveat is that these figures aren\u2019t weighted against the potential for overbuild by rival networks and are thus more of a raw overall total from all operators. Furthermore, there can be a tendency for some operators to report technically unfinished or non-live builds (i.e. you can\u2019t yet order a live service) as Ready for Service<\/strong> (RFS), which can cause complications when forecasting live coverage.<\/p>\n

The Financial Impacts
\n<\/strong><\/span><\/h3>\n

Finally, the study estimates that AltNets currently have an intended capital expenditure (CAPEX) – from 2022 until the end of 2030 – of over \u00a324.2 billion, with operational expenditure of at least \u00a34 billion. But some of this may not be new money (e.g. re-announcements of existing funding) and related build commitments are frequently quite aspirational, thus such figures should be treated with a heavy degree of caution.<\/p>\n

Taking this private sector investment together with the government\u2019s \u00a35 billion Project Gigabit commitment, as well as other planned full fibre investments (e.g. \u00a34.5bn on VMO2’s Nexfibre<\/a> project and \u00a315bn on Openreach<\/a>) until 2030, pushes the overall total to \u00a349bn. The vast majority of that is private funding. Politicians that seek to nationalise broadband might want to take that into account when setting future policy.<\/p>\n

Some previous studies have predicted that it would cost \u00a330bn to cover the UK in full fibre lines, but those studies didn\u2019t factor in the unknown quantity that is competitive overbuild (i.e. multiple operators spending money to build rival networks in the same areas).<\/p>\n

However, INCA doesn’t miss an opportunity to warn that Openreach’s proposed discount to their wholesale FTTP prices for UK ISPs (aka – Equinox 2), could be hugely damaging to AltNets deploying rival networks (here<\/a>). The report again notes that over 2.3m properties in harder-to-reach rural areas have also been passed by altnet fibre networks, which is said to be “something Ofcom<\/a> assumed was not possible in its last market review<\/em>“.<\/p>\n

INCA CEO, Malcolm Corbett, said:<\/strong><\/p>\n

“As this year\u2019s survey results clearly show, Ofcom must assess the potential impact of Equinox 2 on Area 3. Equinox 2 is a live and pressing concern. It has the potential to unfairly foreclose the wholesale market, including in areas where Ofcom mistakenly thought only Openreach might get to, but where it is abundantly clear that Altnets are investing significantly and where they are already making full fibre broadband services available to millions of people.<\/p>\n

Ofcom must not put this investment at risk and jeopardise the digital transformation of small towns and rural areas in the UK.”<\/p><\/blockquote>\n

However, in terms of the issues that AltNets think are most pressing to tackle, Equinox 2<\/strong> actually follows a few places behind the leading concerns. For the second consecutive year, the top two concerns for independent network operators continued to be planning and street works delays, followed by Project Gigabit related challenges. Overbuild by non-incumbent suppliers came in third place.<\/p>\n

Interestingly, access to finance is still way down the table, which is surprising given how vocal some operators and analysts have been about the growing challenges of attracting fresh investment in today’s difficult climate.<\/p>\n

\"INCA-altnet-concerns-2023\"<\/p>\n

Overall, altnets are continuing to have a significant impact across the United Kingdom and that is set to continue for the foreseeable future, which is one of the reasons why major operators are ramping-up their own builds (competition).<\/p>\n

The fact that AltNets have so far scooped all of the initially awarded build contracts under the Government\u2019s new \u00a35bn Project Gigabit<\/strong><\/a> scheme is also promising, but that may change if some of the associated providers start to struggle and the climate for consolidation continues to rise. Politicians will be quick to swoop on any hint of drama, so there are risks for the government in courting lots of relatively young AltNets.<\/p>\n

Just to recap. The goal of Project Gigabit is to help make gigabit-capable networks available to at least 85% of UK premises by the end of 2025 (commercial deployments alone should hit about 80%+) and then \u201cat least<\/em>\u201d 99% by 2030. At the time of writing, around 75% of UK premises can already access such a network and commercial operators alone are widely expected to push this over the 80% mark.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Independent Networks Co-operative Association (INCA) and Point Topic just published their 2023 report into the impact of alternative “full fibre” (FTTP\/B) gigabit broadband networks, which reveals that AltNets grew their UK cover by 50.18% in 2022 to top 8.22 million premises (up from 5.46m in 2021). But the rollout slowed.<\/p>\n","protected":false},"author":1,"featured_media":34459,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[423,65,56,39,38,34,476],"class_list":["post-33846","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-fttb","tag-ftth","tag-fttp","tag-point-topic","tag-politics","tag-statistics","tag-wifi"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nAlternative Full Fibre ISPs Cover 8.2 Million UK Premises as Build Slows - ISPreview UK<\/title>\n<meta name=\"description\" content=\"The Independent Networks Co-operative Association (INCA) and Point Topic just published their 2023 report into the impact of alternative "full fibre"\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2023\/05\/alternative-full-fibre-isps-cover-8-2-million-uk-premises-as-build-slows.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Alternative Full Fibre ISPs Cover 8.2 Million UK Premises as Build Slows - 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