The Importance of the Altnet
Mark Geaney - Broadband Expert
Connectivity Specialist - Transforming UK Business and Consumer Experiences with Efficient, Cost-Effective Solutions... Let’s Talk!
Q. What is an Altnet, and why should it be of interest?
It is the single biggest change happening in our industry today. Driving innovation, creating competition, and offering both consumers and businesses real choice.
The term Altnet, is short for Alternative Network, a network other than the major operators such as Openreach or Virgin Media.
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Q. How many are there and why have they come about?
The UK’s demand for higher bandwidth speeds has already reached a tipping point. Just visualise your own home; we stream Netflix whilst browsing Facebook on our phones. In one bedroom, one child plays Xbox in group chat mode, in another, friends are recording a TikTok video.
With all these devices running at the same time, the existing copper infrastructure is no longer adequate.
Even back in 2019, politicians were claiming full-fibre broadband is an essential utility. Yes, there were misguided truths on who should pay, but there were already Altnets building networks alongside the national (Openreach) rollout.
Currently, there are circa ONE HUNDRED Altnets, but this is rapidly decreasing as market consolidation takes place. By 2030, industry experts, including Richard Tang say it is likely that only 4-6 will remain.
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Q. Are all Altnets the same?
To keep things simple, an internet service has TWO elements:
(e.g. CityFibre, MS3)
(e.g. Brsk, Netomnia)
(e.g. FullFibre, Freedom Fibre)
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Q. Why are there different models?
Because private companies have different objectives. Some want longevity, others want to make as much money as possible and sell at the optimum price.
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Q. Why choose an Altnet over Openreach?
2030 is the year Openreach expects to complete its full-fibre rollout plan. [History indicates this date will be later].
Altnets are servicing regions where Openreach is not yet available. Products which are EXCEPTIONAL VALUE.
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Q. Why are full-fibre prices so low and will this remain?
Prices are at an all-time low, because Altnets need to demonstrate to investors the network has value.
More connections / customers = Greater Network Value
Investors have pumped BILLIONS of pounds into the industry. The initial investment was to build as far and as fast as possible. High inflation has resulted in less organic build, so now [rightly so] need to see a return on investment (ROI) i.e. CONNECTIONS.
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Q. What are the risks associated of choosing the wrong provider?
There are many factors to consider and which does require the trained eye...
..it is best to get advice!
Q. Do you see any trends happening today?
Consolidation in the marketplace has already begun. The formation of AllPoints Fibre; the acquisition of Freedom Fibre and VX Fiber, and the latest collaboration Netomnia and Brsk.
The Merger & Acquisition (MA) model is set to continue, because capital interest rates are stunting build plans.
This is affecting ALL sectors – Today, UK cities are littered with half-built apartment blocks. Prior to 2020, these structures would have completed in 6-8 months, but are still standing half finished.
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Q. What will be the biggest opportunity for Altnets?
BUSINESS CONNECTIVITY - There are Altnets which solely serve the business community [e.g. ITS, Telcom] but the majority focus on residential sales. Although this is extremely important, it is a volume game with slim margins.
Those Altnets who can use their network to serve businesses, will improve margins, increase longevity, and improve their net value when the time comes to sell.
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Q. Is it easy to identify where Altnets are located?
Most comparison sites do not list Altnets. However, Think Broadband is an extremely useful guide, but to understand what is best for YOU…
It's exciting to see how Altnets are shaping the future of connectivity. The competition is sure to lead to more choices for everyone. What innovations are you most looking forward to in this space?