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Alt net customer numbers

Cheese_Me

Member
Does anyone have anywhere a list of, at least the biggest, alt nets by customer numbers? To be clear I don't mean how many homes they've passed but how many customers they've actually won.

I'm trying to understand who has any scale here and it seems ridiculously difficult to find out. Do most of these have half a dozen customers?
 
I'd like to know this as well, specifically for Fibrus as they "won" the NI Executive contract under Project Stratum, therefore received public funds.

The local news/media always spout about how many homes COULD be connected under the project, but I know a lot of people who would not want or need it, especially at the current minimum price point of £30pm for 100Mb.

Then there are people who do want it but their premises are not under Project Stratum, even though the cable goes right by the house! The entire thing is a mess, especially in County Fermanagh who changed the addressing at exactly the same time the Telecoms Department was doing the consultation!!
 
I expect the actual connected customers vs properties passed figure for many AltNets is not particularly flattering. Certain examples spring to mind…

Hence why it’s not readily available.
 
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Hyperoptic and Community fibre have large number of social housing customers in London.

Im with Hyperoptic
 
With a bit of Googling I found this page which is dated February 28, 2022 (so not too old):

https://dgtlinfra.com/kkr-hyperoptic-uk-fiber-passings/

"Presently, Hyperoptic serves over 230k customers in the UK with its fiber-to-the-premises (FTTP) service, implying a ~30% penetration rate. Additionally, the company aims to maintain a penetration rate of at least 30% where its fiber network is over two years old."

So that gives you a good number to play with, 30% penetration after 2 years. In the article Hyperoptic claims to have reached to 750k homes, with CityFibre reaching 1+ million homes, Community Fibre 435k homes and G.Network passes 300k+ premises. So adding all these you get to 2.485m premises. 30% of that is 745.5k or 3/4 of a million. Of course that could be over estimating as 2 years haven't passed on all served premises but then some areas might have >30% penetration rate. There are plenty of other altnets but my rough guess is that this doesn't add more than 1/4 million more customers. So my rough guess is that altnets have about 1 million broadband customers.

Now compare this with the Top 10 UK ISPs By Subscriber Size: https://www.ispreview.co.uk/review/top10.php

It's good to see Hyperoptic in the top 10 already. I will expect Community Fibre to soon overtake KCOM which only serves Hull. But as you can see the altnets have limited impact in the market due to the reduced network reach. The big telcos also use the offers on their dual/triple/quad play bundles to keep their customers as some people want to have a TV subscription and bundling up can save you money if you need/use all the services.

I am on the VM Ultimate Volt bundle paying £ 79/month. If you take £ 45 away from that to discount the 1gb internet that leaves £24 for all these services: 230+ channels including Sky Cinema, BT Sports 4K, Sky Sports HD, unlimited telephone calls, Netflix Standard and an O2 unlimited SIM with free roaming. The SIM plan alone or Sky Sports are each worth more than the remaining £ 24!

So the big telcos are competitive but only on their top bundles which might not suit everyone.
 
In the article Hyperoptic claims to have reached to 750k homes, with CityFibre reaching 1+ million homes, Community Fibre 435k homes and G.Network passes 300k+ premises. So adding all these you get to 2.485m premises. 30% of that is 745.5k or 3/4 of a million. Of course that could be over estimating as 2 years haven't passed on all served premises but then some areas might have >30% penetration rate.
If only it were that simple.

G.network in particular appear to have told journalists one thing but the real numbers as in their companies house annual return are far more…troubling.

We discussed it some months ago over at TBB:

 
If only it were that simple.

G.network in particular appear to have told journalists one thing but the real numbers as in their companies house annual return are far more…troubling.

We discussed it some months ago over at TBB:

So I read that thread and both The Times and the FT articles. Some interesting points there but I disagree with some of the points expressed in particular the doom and gloom on altnets. Here are my take away points:

  1. G.network going under: I couldn't find where G.network quotes as having "just" 8664 customers. Their March 2022 accounts show £4.328m in revenue so if they just had 8664 customers that will average to £41 of revenue per customer per month (£4.328m/8664/12). Using the other 55,000 customers figure comes out at £6.55 of revenue per customer per month which is totally unrealistic since all the G.network plans cost way more than that monthly. However even assuming the low customer figure it's clear that G.network has a low penetration rate and it's not generating enough revenue to sustain it's planned network expansion plans. G.network is asking for more money to achieve it's network objectives. So either they get more funds from investors or they will have to scale their network rollout plan. It's simple to me. The Times article points to their low 2022 £4.3 million revenue but fail to point that they also have 81.5% gross profit on that revenue, before EBITDA items are added (ie investment costs). The directors concerns note that "The Group has a low fixed cost base and is able to actively manage the of capital expenditure on the network rollout". So to me going under doesn't look likely at this stage. But even if they were to go busted the likely scenario is that they are quickly bought by another Altnet (see below) who will not have to service their £745m of debt as it will be written off as part of the administration.
  2. State of the overbuild: The Financial Times article says that "some areas predicted to have six or seven such lines by the end of the decade". This to me is absolutely BS as it's assuming that Altnet network build plans can not be changed/adapted/evolved. The FT article says "The glaring challenge is that BT’s networking division Openreach has rapidly accelerated its fibre build, moving much faster than most of these opportunistic companies anticipated". I think this is wrong in the sense that it's pretty much imposible to predict what Openreach was going to do and when. It's also pretty clear that Openreach was going to upgrade it's whole network sooner or later so I think it would have been very naive for the Altnets thought they could get to an area first and "win" for ever. In fact I have first hand evidence that when my defective telegraph pole was ignored by Openreach for 2 years after FTTP got to our area it was then upgraded with FTTPwithin two weeks of Community Fibre activating it. So if Openreach can adjust their build and target new Altnet areas to prevent customers leaving so can the Altnets. They can move into areas that Openreach has neglected for whatever reason or where they lack capacity to serve. It will financial suicide to have more than 2-3 Altnets in an area where Openreach and VM are already present. This is already covered in the FT article: "For their business models to be economically viable, each of the altnets needs to capture about 40 per cent market share in the locations they are digging, according to industry estimates". Obviously if there are 2 Altnets in an area it will very hard for both of them to achieve 40% penetration. So Altnets will need to adjust their network plans accordingly to avoid high overbuild. There are still plenty of areas in London and the rest of the country without a single Altnet so I don't see an issue with overbuild. In fact I would argue it will imposible for this overbuild to actually happen. Looking at how busy cable ducts are in London and how common duct blackages are due to cable saturation this is going to be a big blocker for overbuild. We may also have telegraph poles reaching max capacity as well. 6 or 7 Altnets in an area is just never going to happen.
  3. Supplier of last resort: this idea is being pushed by the government to "rescue" Altnet customers in case of one Altnet going under. Crucially it is pretty much imposible for BT (or any other ISP or network for the matter) to "migrate" the internet supply of existing customers in a matter of days or weeks, as in the case in energy suppliers going bust. Even if BT could "migrate" these customers to their own network in a short time it's very likely that it may not be able to provide a service or the same type of service to all customers as network coverage varies between networks. Finally Altnets run complete different networks so integrating two ISP networks is very complex project that will probably take months if not years to complete. Could BT be named as an "administrator" of the failed altnet ISP and continue to run the altnet until customers are migrated to its own network? Doubtful. And even if they could why would they want do it? Running a company that is lossing money costs money and BT will not do it unless it is government funded. So I think the analogy with the energy suppliers does not apply to Altnets.
  4. Likely scenario when Altnet goes bust: The most likely scenario for me will be that the Altnet company will be put into administration and their assests will be sold to the highest bidder. The likely buyer will be another Altnet or OR/VM if the Altnet coverage has little overlap with the buyer. If the busted Altnet has significant areas of overbuild with other Altnets and OR/VM, then those areas could be broken out in separate packages at different prices. But even in high overbuild areas it's likely that there will be interest from other networks to adquire the customers of the failed Altnet, at the right price. Depending on how the Altnet network is divided and sold the administrators could continue to run the company until all customers are migrated and the network parts are sold/integrated into the new buyers network. This shouldn't be a problem since once all network build projects are stopped by the failing Altnet and all non-essential employees fired the Altnet costs should be very low (as noted in the G.network Company House accounts) and even be cash flow positive as existing customers under contract will continue to pay for their subscriptions. And a company under administration doesn't have to service it's debts.
  5. A lot of people hate the big Telcos: Like many I dislike the big Telcos and their constant anti consumer and anti customer practices. So in my case and many others there are plenty of opportunities for Altnets to flourish. Cord cutters continue to grow and there will be also the grow of the "dual broadbanders", people like me that want to have two networks connected to their house since the nature of the work means they can't afford to not have internet connectivity. Having said that the big telcos use offers/discounts/loss leaders on dual/triple/quad play bundles to keep customers as some people do want to have a TV subscription and bundling up can save you money if you need/use all the services. The trend is against the big Telcos though, as the UK is expected to loose £1.1m TV subscribers by 2027 (~7%). My bet is that most of those customers will likely end up in Altnets as cord cutters will look for the best connectivity deal or for good customer service / friendly ISP.
  6. Altnets future: I totally agree with The Times that "there will be several phases of consolidation and mergers". But these don't all need to be due to Altnets going busted and hopefully only a few will crash and burn. It's natural at this stage for these networks to build from the ground up as smaller players which will then consolidate into bigger players. Those that grew too fast, have too much debt or deployed into bad/high overbuild areas will be eaten but other better run Altnets. The Times article quotes "BT’s Jansen argues that the slow release of government funds in Project Gigabit has exacerbated the problem of overbuilding, pushing players to compete in the same cheap-to-connect urban areas that already have full fibre, instead of encouraging them to build in more rural places". I disagree with this. Altnets are going for cheap-to-connect urban areas because that's where it makes the most economical sense at the moment. And so is OR. Once those areas are served by a couple of Altnets no one other than OR/VM will want to deploy to them and they will have to move to underserved areas. Of course BT doesn't want Altnets on cheap-to-connect urban areas as that's where THEY also make most of their money. So no wonder they "complain" about this. Instead of complaining they should be applying for the funding and building the hard to reach areas themselves. The Times continues: "Competing with giants such as BT and Virgin Media will be a tricky task. As well as armies of engineers to dig up the roads and install the cables, they have the ability to swoop in and undercut the altnets on customer prices". Disagree on this. Altnets usually undercut the big telcos on prices, at least on broadband only plans. And if BT and Virgin Media undercut the Altnets so be it. We the consumers will benefit from the price war. I would still probably prefer an Altnet rather than BT and Virgin Media as they suck in customer service, renewals, raise above inflation, non-symetric plans, etc.
 
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So all in all I don't subscribe to the doom and gloom theories on those articles. Most of what comes out of BT has to be taken with a grain of salt, part of their strategy is to undermine the credibility of Altnets. It is very encouraging to see in the FT article than in Jan 2022 Altnets have passed Openreach in homes serverd: "Ofcom estimates that alt-net deployment has exceeded Openreach build for the first time". This means the dinosaur woke up too late and now can't stop the Altnets revolution. Sure they have gone into defensive mode and will retain a lot of their customers but the Altnets future is assured. FT quotes "No altnet has yet turned a steady profit, although the biggest — CityFibre — says it will by next year". And The Times says "Hyperoptic has the best take-up of any of the larger national players: 29 per cent of 900,000 homes passed signed up to full fibre. CityFibre only has 6 per cent". Hyperoptic will be hard to overbuild against as they specialise on blocks of flats where special way leave are needed. CityFibre's 6% penetration it's very likely to increase over time, as people leave their long contracts, become cord cutters and are aware of the services available to them.

Perhaps at some point all Altnets will eventually merge into a third Big Telco and become another hated telco. Perhaps they could become two separate ones. Only time will tell. But for the time being Openreach and Virgin Media are going to bleed customers and that my friends is a good thing. Competition is a beauty!

The Times article

The Financial Times article
 
Oh yeah, it's the wild west now and a good time for customers.
In the next few years though I'll expect to see loads of consolidation with bt/or and vmedia gobbling up a lot of the small to medium altnets, maybe even bigger. It's expected.
 
G.network going under: I couldn't find where G.network quotes as having "just" 8664 customers.
Accounts filed with companies house - first link below (62 page PDF). See snapshot from page 6:

 
Oh yeah, it's the wild west now and a good time for customers.
In the next few years though I'll expect to see loads of consolidation with bt/or and vmedia gobbling up a lot of the small to medium altnets, maybe even bigger. It's expected.
I doubt BT/OR will buy any Altnets. It maybe be seen as an anticompetitive move by Ofcom. VM is possible since they don’t actually have a large FTTP network so they can increase their proper fibre network buying Altnets.
 
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I doubt BT/OR will buy any Altnets. It maybe be seen as an anticompetitive move by Ofcom. VM is possible since they don’t actually have a large FTTP network so they can increase their proper fibre network buying Altnets.
If that's the case then I guess some of the bigger ones will gobble up the smaller valuable ones. Consolidation will happen.
 
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