{"id":38476,"date":"2024-06-25T08:14:46","date_gmt":"2024-06-25T07:14:46","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=38476"},"modified":"2024-06-25T09:00:03","modified_gmt":"2024-06-25T08:00:03","slug":"nexfibre-calls-for-changes-to-protect-uk-fibre-broadband-market","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2024\/06\/nexfibre-calls-for-changes-to-protect-uk-fibre-broadband-market.html","title":{"rendered":"Nexfibre Calls for Changes to Protect UK Fibre Broadband Market"},"content":{"rendered":"

Network builder nexfibre<\/a>, which is being supported by UK ISP Virgin Media<\/a> (O2<\/a>), has today warned that the progress on rolling out gigabit full fibre (FTTP<\/a>) broadband networks across the UK remains “fragile<\/em>” and it wants Ofcom<\/a> to take “decisive action<\/em>” to prevent the “mistakes of the past<\/em>” (i.e. Openreach<\/a> domination) from being “repeated<\/em>“.<\/p>\n

So far Nexfibre<\/a> has covered over 1 million premises across the UK with their new network and they\u2019re currently in the process of investing another \u00a31bn during 2024, which should enable them to cover an additional 1 million premises. The project reflects a \u00a34.5bn joint venture between Telef\u00f3nica, Liberty Global and InfraVia Capital Partners, which was setup in 2022 (here<\/a>) and shares some of the same parentage with Virgin Media<\/a>.<\/span><\/p>\n

NOTE:<\/strong> Virgin Media<\/a> is the only retail provider on nexfibre<\/a>\u2019s network via an \u201cexclusive partnership\u201d<\/em> (here<\/a>), but they\u2019re planning to add more ISPs in the future (here<\/a>). Virgin\u2019s own network will also shortly open up to wholesale via NetCo (here<\/a>).<\/div>\n

The operator’s ultimate aim is to deploy an open access fibre network to reach \u201cup to<\/em>\u201d 7 million UK homes (starting with 5m by 2026) in areas NOT currently served by Virgin Media\u2019s network of 16m+ premises. But they’re also mindful of how their plans and vested interests could potentially be impacted by Ofcom<\/a>’s upcoming Telecoms Access Review 2026<\/strong> (here<\/a>), which is naturally something they’d want to protect.<\/p>\n

As part of this concern, the operator has today published a new report – ‘Platform for progress<\/strong><\/a>‘. The report broadly calls on the industry, policymakers and Ofcom<\/a> to work together in order to focus on “prioritising competition, investment and innovation<\/em>,” while at the same time avoiding any changes that could cause the UK to “head back to a place where there is a single dominant provider<\/em>” (i.e. Openreach<\/a>).<\/p>\n

The report advocates for 3 “crucial” areas:<\/strong><\/span><\/p>\n

\u27a4 A stable regulatory environment which continues to attract the much-needed investment in the UK\u2019s digital infrastructure. The only way the UK can drive momentum beyond the current roll-out is to ensure a sustainable, competitive market long term.<\/p>\n

\u27a4 A regulatory framework which ensures a consistent and equitable playing field for all operators. Regulators and policymakers must restrain anti-competitive behaviour from the incumbent and put in place a regulatory framework which addresses exclusion of competitors.<\/p>\n

\u27a4 A market characterised by sustainable competition rather than fragmented sub-scale operators. The UK needs national-scale wholesale competition to secure future progress and generate the right conditions to accelerate innovation and development in the full-fibre market.<\/p><\/blockquote>\n

The final point above, which seems targeted at smaller alternative networks (Altnets), almost reads like an attempt by nexfibre<\/a> to have their cake and eat it (i.e. arguing both against a single dominant provider and, at the same time, a patchwork market of smaller altnets). As we said, vested interests are all at play here, given that nexfibre’s build targets the upper middle ground of market scale (5-7m premises).<\/p>\n

On the other hand, natural market consolidation is likely to resolve their final point over time and without Ofcom needing to do much, although there will always be some smaller altnets left at the end of that phase – often reflecting those that serve a particular niche or being more of the community benefit model. At the very least, nexfibre won’t want roadblocks being put in the way of that consolidation by the regulator (this isn’t an issue today, while altnets are smaller, but may become a problem at the larger end of the market).<\/p>\n

Rajiv Datta, CEO of nexfibre, said:<\/strong><\/p>\n

\u201cI am delighted to publish nexfibre\u2019s \u2018Platform for Progress\u2019 report, reflecting on our first year operating in the market and taking a critical look at what is needed to further unlock the sector\u2019s potential.<\/p>\n

As we have set out today, the market faces a series of challenges. Some of these have been driven by a historic lack of investment and others have been the result of external factors. All of them can be overcome if we create a dynamic market environment conducive to competition and progress.<\/p>\n

I look forward to working with industry partners and policymakers as we move towards delivering digital infrastructure that is fit for the future.\u201d<\/p><\/blockquote>\n

The press release for this report isn’t particularly helpful in identifying the specific changes that nexfibre may be seeking, although the full report does offer a few insights. For example, it calls for a review of pricing for access to Openreach<\/a>’s cable ducts and poles (PIA – Physical Infrastructure Access<\/strong>) to resolve “inconsistencies in the way PIA is priced that leads to altnets paying significantly more for ducts and poles than Openreach charges itself<\/em>,” which is something that a lot of Altnets would support.<\/p>\n

The report also lodgeds frustration at the way Openreach discounts prices to attract customers to its own FTTP<\/a> broadband lines (e.g. Equinox 1 and 2), which is something we’ve covered before (here<\/a>) and remains a highly contentious topic. Altnets often feel this makes it harder for them to grow and attract fresh investment, while on the flip side, Openreach’s prices are often beaten by Altnets and they naturally want to be able to compete with that.<\/p>\n

Nexfibre then proceeds to highlight the importance of Ofcom being able to deliver “regulatory stability<\/em>“, which we’d agree is, at this stage, a key part of helping to incentivise investment. “Stable, consistent regulation over a long period of time maintains the environment needed to support long term investment horizons<\/em>,” said the report. On the other hand, there’s not a lot that Ofcom can do about the wider economic challenges, such as high interest rates, which also hamper investment.<\/p>\n

Finally, it’s worth noting that nexfibre’s report expresses their network and Virgin Media’s network as being part of a “combined<\/em>” wholesale platform (at present they’ll still legally separate, despite being about as closely knit as you can get), which they say will serve “over 21 [million] premises<\/em>” (if nexfibre achieves its full aspiration, this could reach 23 million by 2028). But the catch is that a combined network of this size would also become more subject to Ofcom’s regulations.<\/p>\n

“We have a strong partnership with Virgin Media O2<\/a>, one of the UK\u2019s largest ISPs, and we intend to offer our footprints for wholesale access on a combined basis of over 21M premises. This creates a true national scale alternative, which the market has lacked thus far \u2013 making us a natural home for growth-minded ISPs who prioritise quality, stability, and a great customer experience<\/em>,” said the report.<\/p>\n","protected":false},"excerpt":{"rendered":"

Network builder nexfibre, which is being supported by UK ISP Virgin Media (O2), has today warned that the progress on rolling out gigabit full fibre (FTTP) broadband networks across the UK remains “fragile” and it wants Ofcom to take “decisive action” to prevent the “mistakes of the past” (i.e. Openreach domination) from being “repeated“.<\/p>\n","protected":false},"author":1,"featured_media":37150,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[56,2714,36,69,475],"class_list":["post-38476","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-fttp","tag-nexfibre","tag-ofcom-regulation","tag-bt-openreach","tag-virgin-media"],"share_on_mastodon":{"url":"https:\/\/mastodon.social\/@ispreview\/112676030886934325","error":""},"yoast_head":"\nNexfibre Calls for Changes to Protect UK Fibre Broadband Market - ISPreview UK<\/title>\n<meta name=\"description\" content=\"Network builder nexfibre, which is being supported by UK ISP Virgin Media (O2), has today warned that the progress on rolling out gigabit 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\/2024\/06\/nexfibre-calls-for-changes-to-protect-uk-fibre-broadband-market.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Nexfibre Calls for Changes to Protect UK Fibre Broadband Market - 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