In the rapidly evolving UK broadband market, a recent study by Neos Networks reveals a significant business trend among alternative network providers, commonly known as Altnets. According to the research, an overwhelming 96% of UK Altnets are considering mergers and acquisitions (M&A) as part of their strategy to thrive and expand in an increasingly competitive environment.
The research, carried out by Censuswide, examined the obstacles facing Altnets. A striking 55% of respondents pointed out that their potential customers are tied up in preexisting contracts. This highlights the competitive threats they face from established providers. Additionally, 47% cited a lack of customer awareness about their services, compounded by fierce regional competition with up to four other providers.
Economic challenges also weigh heavily on Altnets. Nearly half of the surveyed Altnets have struggled to access funding in the past year, with high-interest rates being a primary concern. Additionally, regulatory challenges, such as BT‘s transition from copper to full fibre networks, have posed logistical and financial challenges. The research indicates that removing equipment from BT’s exchanges, set to begin closures in January 2027, could cost them around £1.4 million on average.
Forward-thinking is crucial for Altnets looking to secure their future. Nearly all respondents (98%) indicated they are planning to diversify their services beyond traditional broadband offerings. This ambition includes launching smart home technology (46%), offering enterprise connectivity solutions (43%), rolling out security packages (42%), and introducing multi-service solutions such as TV and entertainment (35%).
Customer satisfaction emerges as a top priority, with 55% of Altnets naming it their primary focus over the next few years. They are leveraging advanced technologies like Software-Defined Networking and Network Function Virtualisation (53%) to stand out in the market. Notably, technologies like 5G Fixed Wireless Access (39%) and AI/ML-enabled BSS automation have significant traction.
The CEO of Neos Networks, Lee Myall, remarked, “Altnets have played a pivotal role in reshaping the UK’s connectivity landscape, driving the expansion of full-fibre networks and challenging established incumbents. However, the industry now stands at a crucial crossroads.”