{"id":38027,"date":"2024-05-08T18:15:40","date_gmt":"2024-05-08T17:15:40","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=38027"},"modified":"2024-05-08T18:15:40","modified_gmt":"2024-05-08T17:15:40","slug":"report-examines-why-openreachs-uk-full-fibre-take-up-beats-altnets","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2024\/05\/report-examines-why-openreachs-uk-full-fibre-take-up-beats-altnets.html","title":{"rendered":"Report Examines Why Openreach’s UK Full Fibre Take-up Beats AltNets"},"content":{"rendered":"

A new report from strategic consultancy firm Eight Advisory has examined the question of why the average consumer take-up across alternative full fibre (FTTP<\/a>) broadband networks (Altnet) is currently still at 16%, while Openreach<\/a> stands at c.34%, despite the collective footprint of the new challengers now equalling that of the incumbent.<\/p>\n

Network access provider Openreach<\/a> (BT<\/a>) recently revealed that their Fibre-to-the-Premises (FTTP<\/a>) based broadband ISP network had covered 14 million UK premises. By comparison, the Independent Networks Co-operative Association<\/a> (INCA) and Point Topic<\/a> recently claimed (here<\/a>) that Altnet coverage had grown by 57% in 2023 to top 12.9 million premises (up from 49% and 8.22m in 2022).<\/p>\n

Despite all this progress, consumer take-up among AltNets is still lagging a long way behind the incumbent on around 16% (ranges from 5 to 30% – based partly on network maturity). At the same time, many Altnets, under pressure from rising build costs, high interest rates and investors, are now increasingly switching their focus from growing build to growing adoption (take-up).<\/p>\n

The new paper from Eight Advisory<\/a> (here<\/a>), which is actually the first of two new papers (a future second one will propose actionable recommendations to drive penetration), acts as somewhat of a high level summary for all these events and covers a number of the obstacles to adoption, many of which will be familiar to our regular readers.<\/p>\n

The chart below shows take-up rates of major UK fibre network operators over the 2021 to 2024 period.<\/p>\n

\"Eight-Advisory-summary-of-UK-full-fibre-network-takeup\"<\/p>\n

Take note that take-up is somewhat of a dynamically scaled measurement, which can be suppressed when a new network roll-out is ramping up and building at a rapid pace. This is why it’s important never to look at a single average % figure in isolation, without context, because the figure may go up or down depending upon the state and age of a build. Take-up also grows organically over time, often taking several years to reach a level of maturity post-build.<\/p>\n

Key Identified Challenges<\/strong><\/span><\/p>\n

\u27a4 The UK consumer broadband market is highly concentrated on five big ISPs, four of whom buy wholesale broadband from the incumbent Openreach<\/a>. But Altnets have, apart from CityFibre<\/a> with TalkTalk<\/a> and Vodafone<\/a>, been largely unable to break into this significant route to market. Lack of consumer familiarity with smaller brands is a well-known issue.<\/p>\n

ISPr Editor\u2019s Note:<\/strong> In fairness, TalkTalk<\/a> does in fact sell packages via several other Altnets, such as Freedom Fibre<\/a>, Community Fibre and a few more. But this isn’t all that well known among consumers.<\/p>\n

\u27a4 The proliferation of multiple small networks makes it costly and complex for the larger ISPs to work with Altnets. The much-anticipated consolidation and the integration of networks and IT systems may provide a clearer route for larger ISPs.<\/p>\n

\u27a4 Competition at the wholesale level is expected to grow once Virgin Media<\/a> opens up their national broadband network in the near future (here<\/a>), which could make it even harder for Altnets, especially if some of the bigger ISPs choose VMO2 over smaller alternatives.<\/p>\n

\u27a4 The longer established Altnets report average take-up across their networks of around 30% with fluctuations impacted by changes in rollout speed and some churn. Hyperoptic<\/a> and Gigaclear<\/a> show that convincing people to move to a full fibre service takes a long time and consistent marketing effort. Neither currently sell through wholesale.<\/p>\n

As with the longer established Altnets, in established footprint take-up can be much higher. In Stirling, CityFibre<\/a> state their penetration has exceeded 23% and in Milton Keynes, its most mature network footprint, penetration has now passed 27%. As with any average, some areas will be lower.<\/p>\n

ISPr Editor\u2019s Note:<\/strong> Technically Gigaclear<\/a> does in fact do a wholesale product, although only a few ISPs (e.g. Squirrel Internet) seem to sell this. But that’s not surprising given the vertical integration of Gigaclear<\/a> and their lack of incentive toward offering a truly fair, accessible and competitive wholesale propostion (i.e. like Openreach or CityFibre<\/a>).<\/p><\/blockquote>\n

As we say, the paper doesn’t go into a lot of detail or contain any surprises, but it does provide for a simple overview of the current state of affairs.<\/p>\n

Partner of Eight Advisory, Nick Breadner, said:<\/strong><\/p>\n

\u201cDriving penetration & takeup is one of the number one goals of UK altnets. The expected consolidation will shake up both the retail and wholesale markets but the combined challenges of agreeing valuations, manging integration at the network, operational and commercial levels, and onboarding new larger ISPs will provide new challenges for altnets and the emerging consolidators\u201d.<\/p><\/blockquote>\n

We look forward to seeing the next paper, which is arguably going to be much more interesting, particularly given its promise of recommendations. On the other hand, we would have much rather seen a single paper instead of splitting it up in this way. Otherwise, it will be interesting to see how much of what they may recommend ends up echoing the previous GigaTAG report<\/a> from four years ago, which looked at the same issue.<\/p>\n","protected":false},"excerpt":{"rendered":"

A new report from strategic consultancy firm Eight Advisory has examined the question of why the average consumer take-up across alternative full fibre (FTTP) broadband networks (Altnet) is currently still at 16%, while Openreach stands at c.34%, despite the collective footprint of the new challengers now equalling that of the incumbent.<\/p>\n","protected":false},"author":1,"featured_media":25721,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[474,471,56,69,38,66,74,475,96],"class_list":["post-38027","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-bt","tag-bduk","tag-fttp","tag-bt-openreach","tag-politics","tag-sky-broadband","tag-talktalk","tag-virgin-media","tag-vodafone"],"share_on_mastodon":{"url":"https:\/\/mastodon.social\/@ispreview\/112406603153120252","error":""},"yoast_head":"\nReport Examines Why Openreach's UK Full Fibre Take-up Beats AltNets - 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