Challenges for Altnets: Attaining Only Half of BT Openreach’s Penetration Rate – An EightAdvisory Analysis

EightAdvisory, an independent advisory firm specialising in transactions, restructuring, and transformation in the UK & Europe, has today published a compelling report (using some of Point Topic’s industry data) that sheds light on the challenges alternative network providers (altnets) encounter as they attempt to expand their market presence in comparison to Openreach. The report offers valuable insights, revealing a significant disparity in market penetration. Despite having access to a similar number of homes, BT Openreach boasts an average take-up rate of 32%, while its competitors lag behind at just 16%.

This analysis forms the first part of a series released today by Eight Advisory UK, highlighting the competitive dynamics in the sector.

The report highlights the challenging dynamics within the Consumer ISP market, where five major brands dominate 90% of the market. This concentration presents a significant barrier for alternative network providers (altnets), who, despite facing stiff competition from retail ISPs, struggle to establish themselves as wholesale providers due to their comparatively limited reach.

In the UK, the landscape is further complicated by substantial capital expenditures required for network construction, fierce competition in certain geographic regions, and relatively low customer uptake—factors that contrast sharply with the situation in other European countries.

Nick Breadner, a partner at Eight Advisory, remarked, “Driving penetration and uptake remains a primary objective for UK altnets. The anticipated market consolidation is expected to significantly impact both the retail and wholesale sectors. However, the challenges involved in reaching fair valuations, managing network, operational, and commercial integrations, and bringing on board new, larger ISPs will introduce fresh complexities for altnets and the consolidators emerging in this space.”

Report co-author and special advisor to Eight Advisory, Chris Stening added “In a market set for consolidation, fewer networks delivering a larger number of homes will make it more attractive for the larger ISPs to partner with altnet networks. This will drive takeup further with the marketing efforts of the large ISP brands. There are however many examples of current Altnet good practice & learnings which we will cover in part two of our report.”

To read the full report (we highly recommend you do), you can click this link here or visit EightAddvisory’s website here.

Jonny Rae

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