{"id":44649,"date":"2026-05-05T00:01:50","date_gmt":"2026-05-04T23:01:50","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=44649"},"modified":"2026-04-24T15:57:27","modified_gmt":"2026-04-24T14:57:27","slug":"fibrus-md-warns-ofcom-may-have-killed-private-investment-in-rural-uk-broadband","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2026\/05\/fibrus-md-warns-ofcom-may-have-killed-private-investment-in-rural-uk-broadband.html","title":{"rendered":"Fibrus MD Warns Ofcom May Have Killed Private Investment in Rural UK Broadband"},"content":{"rendered":"

The Group MD and CFO of alternative network ISP Fibrus<\/a>, Colin Hutchinson, has today spoken to ISPreview about the challenges of building full fibre networks in rural areas, their approach to market consolidation and on how they fear the outcome of Ofcom<\/a>’s recent market review “entrenches Openreach<\/a>\u2019s dominance<\/em>” and “all but kills the prospect of future private investment in many rural areas<\/em>“.<\/p>\n

For those who may be unfamiliar, Fibrus<\/a> and network delivery partner Viberoptix<\/a> have spent the past few years rolling out a new Fibre-to-the-Premises<\/strong> (FTTP<\/a>) broadband network across Northern Ireland<\/strong>, before more recently expanding into Cumbria<\/strong> (England). The work has been supported by a mix of public and private investment (public funding has mostly been used for their rural builds).<\/p>\n

NOTE:<\/strong> Fibrus<\/a> has so far invested c. \u00a3750m and some \u00a3300m has come from government subsidies, with the balance from their senior debt facility and shareholders. Some of their publicly funded builds include Project Stratum<\/strong><\/a> (81,000+ premises in N.Ireland) and the Project Gigabit (Hyperfast GB<\/strong><\/a>) contracts for 53,500 premises in Cumbria (here<\/a>) and 9,000 premises in N.Ireland (here<\/a>).<\/div>\n

The provider\u2019s full fibre network, which recently achieved a positive take-up rate of 30% (here<\/a>) – rising to 40% for their subsidised network footprint in N.Ireland, currently covers over 465,000 UK homes (more than 330,000 of those are in N.Ireland) and they now have a total of 142,000 connected customers.<\/p>\n

Suffice to say that the operator has been making some good progress and Colin indicates that this growth, combined with the tapering down of their build programme, “will see us achieve cashflow breakeven within 12 months<\/em>“. In fact Fibrus currently expects to be “generating cash to repay our investors<\/em>” in around 5-years’ time.<\/p>\n

Despite all the positives, Colin complains that Fibrus has been left “deeply disappointed<\/em>” by the outcome of Ofcom<\/a>’s recent 5-yearly Telecoms Access Review 2026<\/a> (TAR), which he says “failed<\/em>” to address a claimed “margin squeeze<\/em>” being faced by rural broadband providers.<\/p>\n

“Ofcom<\/a>\u2019s rules force operators to pay up to 20 times as much for Openreach<\/a> PIA products in rural areas as compared to urban areas<\/em>,” said Colin, who feels their complaints have been “ignored<\/em>“. But Ofcom and the government have rejected this argument, which the Group MD warns could “entrench Openreach<\/a>\u2019s dominance<\/em>” and “all but kills the prospect of future private investment in many rural areas<\/em>“.<\/p>\n

The issue of market consolidation also came up in our new Fibrus interview. Colin’s perspective is that a business plan requiring mergers and acquisitions (M&A) is a “poor<\/em>” one and their approach is instead based on continuing to be a “strong independent regional operator<\/em>“. But they also say they’ll be “opportunistic and take advantage of any [consolidation] deals that make sense<\/em>“, before adding that they aren’t dependent upon it.<\/p>\n

The Fibrus Interview with Colin Hutchinson<\/strong><\/span><\/h3>\n

Q1. Before we get started on other questions, can you provide a general update on Fibrus’ current network coverage (premises passed), customer take-up and total level of funding\/investment?<\/strong><\/p>\n

Colin’s response:<\/strong><\/span><\/p>\n

At the end of January we passed 465k homes with 142k connected customers, just over 30% penetration up 4 points over the last 12 months despite 60k new prems being added to the network. Our ARPU has also increased by 15% over the same period.<\/p>\n

We\u2019ve invested around \u00a3750 million to date, \u00a3300 million has come from government subsidies with the balance from our senior debt facility and shareholders.<\/p><\/blockquote>\n

Q2. Firstly, congratulations on having recently secured the \u00a334.6m (public subsidy) Project Gigabit broadband roll-out contract to reach 9,000 of the hardest to reach rural homes and businesses in N.Ireland. This of course comes shortly after Fibrus completed, on time and within budget, the Project Stratum contract for the same region, which expanded full fibre to reach a further c.81,000 premises in more challenging locations.<\/strong><\/p>\n

Colin’s response:<\/strong><\/span><\/p>\n

We were delighted to complete the Project Stratum contract on time and within budget. The Project Gigabit NI contract allows us to build on this success and roll out to more underserved rural communities. These achievements are testament to the skill and dedication of the team of over 600 people working all day every day to bring world class broadband to rural and underserved communities in NI and Cumbria.<\/p>\n

From a recent independent Economic Impact Assessment, we know of the huge benefit fibre connectivity makes in terms of levelling up opportunity in rural parts of the country.<\/p><\/blockquote>\n

Q3. What were the biggest challenges you faced in getting Project Stratum delivered on time and do you expect the new Project Gigabit deployment, which will presumably reach into even more remote and rural areas, to be even more of a challenge than Stratum?<\/strong><\/p>\n

Colin’s response:<\/strong><\/span><\/p>\n

Constructing network in remote rural areas presents various build challenges which aren\u2019t faced by urban focused network builders. Our construction arm, Viberoptix, has expertise in building in rural environments across Northern Ireland and Cumbria.<\/p>\n

The additional NI Gigabit premises are spread across the whole of NI in similar areas to our Stratum build so we don\u2019t anticipate these presenting a bigger challenge than Stratum.<\/p><\/blockquote>\n

Please flick over to Page 2 in order to finish reading the full interview.<\/p>\n

<\/p>\n

Q4. Getting the network built is of course only part of the challenge, since you also need to attract customers to use it and payback the investment. Fibrus recently announced having achieved a take-up level of 30%, which is up from 28% in March 2025 and continuing to rise.<\/strong><\/p>\n

What level of take-up is Fibrus ideally targeting over the next few years in order to achieve payback and is network overbuild by competitive rivals, such as Openreach, a serious threat to achieving this? Speaking of which, do you think there’s anything the industry could be doing differently to help boost take-up?<\/strong><\/p>\n

Colin’s response:<\/strong><\/span><\/p>\n

Fibrus is already over 30% across our entire footprint, with our NI subsidised footprint over 40% and our NI commercial footprint over 30%. Both continue to grow and we don\u2019t see much of a slowdown as our market share continues to grow.<\/p>\n

It\u2019s worth noting that this performance includes commercial footprint in NI where we have almost total Openreach overbuild. Fibrus has developed a reputation based on the quality of our product, at fair and transparent pricing backed up by excellent customer service. A mix that our competitors just can\u2019t match.<\/p>\n

In GB both subsidised and commercial, our take up performance is ahead of where NI was at the same level of maturity.<\/p>\n

So we already see a clear pathway to the high 30\u2019s, maybe low 40\u2019s in terms of blended penetration. We see this as a validation of our model both in terms of where we have built our network and how we operate it.<\/p><\/blockquote>\n

Q5. Back in mid-2025 Fibrus announced that they’d achieved a positive EBITDA (i.e. earnings before interest, taxes, depreciation, and amortisation) for the first time, which is known as an important step on the way to becoming truly profitable. But with the usual losses and debt repayments to consider from a big network build, there’s still a long way to go on the road to payback.<\/strong><\/p>\n

In terms of the company’s financial situation, where does Fibrus expect to be in 5-years time and is there anything – realistically speaking – that the government’s Chancellor could do, such as in terms of taxation and business investment, to help speed things along positively?<\/strong><\/p>\n

Colin’s response:<\/strong><\/span><\/p>\n

Fibrus is delivering the plan against which we raised our funding, hitting EBITDA breakeven was pleasing as it is another milestone in terms of proving the business plan and it is a milestone that many of our peers still haven\u2019t reached.<\/p>\n

Our EBITDA number has continued to grow month on month during the financial year as revenues increase on higher penetration and higher ARPU while costs are tightly controlled. This growth, combined with the tapering down of our build programme will see us achieve cashflow breakeven within 12 months.<\/p>\n

Looking forward to five-years in the future we expect to be generating cash to repay our investors.<\/p>\n

Anything the Chancellor can do to control inflation and create the conditions for continued decrease in interest rates would of course be very welcome. Alongside further support to reach any parts of the country which are still underserved by full fibre networks.<\/p>\n

Building in rural locations is naturally more expensive than in urban areas and maintaining these networks is also more expensive. The way Ofcom allows Openreach to charge for PIA access on a per metre rather than per customer basis makes the cost of operating rural networks as prohibitive as the cost of building them. It seems to us that the Government and Ofcom are ignoring this problem and are content to allow BT<\/a>\u2019s rural copper monopoly to persist for decades to come. Fibrus has been raising this issue with Ofcom and with members of the government during the Telecoms Access Review. We feel we are being ignored.<\/p><\/blockquote>\n

Q6. Assuming all goes to plan and Fibrus eventually completes its existing commercial and subsidised builds, what do you foresee as the company’s next big step? Put another way, is there any scope for further significant network build beyond existing plans, or is the focus for the foreseeable likely to remain more concentrated around commercialisation of what has already been built?<\/strong><\/p>\n

Colin’s response:<\/strong><\/span><\/p>\n

Our priority is on completing the remainder of our build programmes, which is largely now our subsidised builds in NI & Cumbria, and on growing penetration in our footprint to the levels discussed earlier.<\/p>\n

In terms of future significant network build, it may be that the combined build plans of altnets and incumbents fails to deliver full fibre broadband to all parts of the UK. Fibrus has established itself as probably the most successful rural network builder and if further rural opportunities exist in the future we would certainly consider them.<\/p>\n

Fibrus remains gravely concerned that a combination of failed BDUK contracts and Ofcom\u2019s refusal to deal with PIA pricing will allow BT<\/a> to re-establish its rural copper monopoly creating a long term digital divide that will destroy affected rural communities.<\/p><\/blockquote>\n

Q7. I guess we can\u2019t talk about the current climate without touching on the tricky question of consolidation. Fibrus has built itself a strong position in Northern Ireland and is expanding across Cumbria in England. Do you now see the company more as being an attractive prospect for being consolidated by a bigger fish, or are you likely to focus more on remaining independent, while potentially raising fresh investment to do a little consolidating of your own?<\/strong><\/p>\n

Colin’s response:<\/strong><\/span><\/p>\n

A business plan that requires M&A is a poor business plan. Fibrus is in a very strong position with a build programme that is well advanced and we have two geographies where we have little other altnet presence, and our penetration and ARPU continue to grow and to lead the industry. Our business plan is based on us continuing as a strong independent regional operator.<\/p>\n

There is a lot happening in the market now in respect of consolidation and we keep a close eye on how things are developing and the opportunities they present. We will be opportunistic and take advantages of any deals that make sense but we don\u2019t need any deals to happen to deliver our returns.<\/p><\/blockquote>\n

Q8. By the time people read this, Ofcom will have published their latest Telecoms Access Review 2026<\/a> (TAR), which will look to make changes that “promote competition and investment<\/em>” in gigabit broadband and business connectivity. As such, I wonder what your thoughts are on the regulator’s proposals, particularly what you think they got right and where you think it could be improved?<\/strong><\/p>\n

For example, we note that Fibrus has been particularly vocal on the cost of harnessing the Physical Infrastructure Access (PIA) product, which is the regulated service that allows rival networks to run their own fibre via Openreach\u2019s existing cable ducts and poles.<\/strong><\/p>\n

Fibrus has said before that PIA is unfairly expensive for rural builds (its prices are set by Ofcom), while Openreach argue that rural builds always cost more (even for them) and they have to be able to recover those costs and achieve a return on the investment to build that infrastructure in the first place. Openreach also often complains that rivals, like Fibrus, don\u2019t share access to their own infrastructure in the same way.<\/strong><\/p>\n

In any case, the Government’s recently published Statement of Strategic Priorities<\/a> (SSP) appears to have already rejected the changes that Fibrus were hoping Ofcom might make.<\/strong><\/p>\n

Colin’s response:<\/strong><\/span><\/p>\n

Unfortunately, the outcome of the TAR was deeply disappointing as it failed to address the margin squeeze faced by rural broadband providers.<\/p>\n

Ofcom\u2019s rules force operators to pay up to 20 times as much for Openreach PIA products in rural areas as compared to urban areas. Ofcom also insists every other Openreach product is priced nationally with no difference between rural and urban areas. This means that operators, such as Fibrus, paying these silly PIA prices are unable to recover the excess charges through higher prices as our competitors (such as Sky and Vodafone<\/a>) pay the same price for services to rural homes as they do for urban homes.<\/p>\n

As we had warned throughout the process, the failure to reform rural PIA pricing makes investment in rural broadband significantly more difficult. This decision all but kills the prospect of future private investment in many rural areas, leaving homes and businesses facing years more of poor connectivity.<\/p>\n

Rural altnets like Fibrus have invested heavily to bring full fibre to communities that were historically left behind by the market. However, Ofcom\u2019s decision entrenches Openreach\u2019s dominance and makes it all but impossible for rural broadband companies to operate sustainably. The result will be a slower rollout, reduced competition, and a widening digital divide between urban and rural areas across the UK.<\/p>\n

Despite the Government and Ofcom maintaining a pricing framework that favours Openreach and places altnets at a structural disadvantage in building and operating rural networks, we will not retreat or pause our investment in rural areas in the UK. Rural altnets like Fibrus remain crucial to delivering genuine competition and breaking the barriers that leave rural areas underserved.<\/p><\/blockquote>\n

Q9. We’ve talked about Openreach a bit already, but I wanted to ask you about the impact of their looming plan to close c.4,600 of their old legacy exchanges across the UK. The move will ultimately leave around 1,000 exchanges \u2013 the Openreach Handover Points (OHPs) \u2013 that are primarily used to provide nationwide coverage of modern \u201cfibre\u201d based broadband and other services (FTTC<\/a>, FTTP<\/a> etc.). The first c.100 of these are due to be closed by 2030 as part of an initial pilot phase, but most of the rest will follow during the 2030s.<\/strong><\/p>\n

How much of an impact is the Exchange Exit Programme likely to have on your network, if any, and are there any areas of Openreach\u2019s approach to this that could still do with some improvement?<\/strong><\/p>\n

Colin’s response:<\/strong><\/span><\/p>\n

The gradual closure of the Openreach copper network should benefit Fibrus if it stimulates more customers to move from slow copper broadband onto full fibre. Given the location of the Fibrus footprint we expect to benefit from this.<\/p><\/blockquote>\n

We’d just like to thank Colin for agreeing to take part in this interview and for providing such useful commentary. We look forward to seeing how Fibrus evolves over the next few years as the wider market’s many challenges continues to put pressure on the industry.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Group MD and CFO of alternative network ISP Fibrus, Colin Hutchinson, has today spoken to ISPreview about the challenges of building full fibre networks in rural areas, their approach to market consolidation and on how they fear the outcome of Ofcom’s recent market review “entrenches Openreach\u2019s dominance” and “all but kills the prospect of […]<\/p>\n","protected":false},"author":1,"featured_media":45516,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[2716,1],"tags":[444,1995,56,414],"class_list":["post-44649","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-interviews","category-uk_isp_news","tag-cumbria","tag-fibrus","tag-fttp","tag-northern-ireland"],"share_on_mastodon":{"url":"https:\/\/mastodon.social\/@ispreview\/116518802643752080","error":""},"yoast_head":"\nFibrus MD Warns Ofcom May Have Killed Private Investment in Rural UK Broadband - 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