Eight Advisory Report, Part 2 – How Altnets Can Close The Penetration Gap

If you’re in the broadband industry, particularly with a stake in the UK’s Altnets (Alternative Networks), Eight Advisory’s latest report is a must-read. Here’s why this insightful piece is crucial for anyone looking to understand and navigate the current and future landscape of fibre networks.

The report delves into the critical shift happening among fibre builders in the UK. No longer is the primary focus just on building networks; the new game is all about filling these networks with end customers, a metric known as penetration or take-up percentage. With the average take-up for Altnets hovering around 16%, compared to BT Openreach’s 32%, there’s a significant gap that needs addressing.

You can read the full report (which we recommend) here. We’ve put together a short version below…

Key Insights and Strategic Focus Areas
Engagement and Communication: The report emphasizes the importance of early stakeholder engagement. Starting conversations with residents and local stakeholders long before the build begins is crucial. Pre-registering interest and keeping the community informed can significantly boost take-up rates.

Retail Proposition: Having a strong retail proposition is essential. This means not just competitive pricing, but also unique product options and added value that can set Altnets apart from the big ISPs. A compelling brand and customer-friendly offerings are key to winning over new customers.

Consistent Marketing Effort: Consistency is vital. The report highlights the need for ongoing marketing efforts across the entire network footprint. Picking up referrals and converting customers as they come out of contracts can drive continuous growth.

Maximizing Commercial Opportunities: Ensuring that all homes are sellable, or having a plan to make them sellable quickly, is another crucial point. This avoids wasted investment and ensures a higher take-up rate.

Wholesale vs. Retail Strategies
The report also discusses the strategic dilemma of whether Altnets should focus on retail markets or adopt a wholesale strategy. Competing head-to-head with big providers in the retail market offers control but comes with high costs and complexity. Alternatively, a wholesale strategy, where networks are opened to other ISPs, can drive penetration and reduce churn impact, even though it may introduce conflicts around retail cannibalization and pricing.

Practical Recommendations
Eight Advisory provides actionable recommendations to help Altnets drive take-up and profitability. These include:

Effective Prebuild Communication: Engage with residents early through various channels like community events, social media, and direct mail to create awareness and interest.
Creating Advocates: Identify early adopters and turn them into advocates with referral programs, leveraging local engagement to accelerate take-up.
Service Differentiation: Differentiate through exceptional service and managing Trustpilot scores, ensuring a positive installation experience that can lead to word-of-mouth referrals.
Addressing Market Challenges
The report doesn’t shy away from the broader market challenges, such as the complexity and cost of integrating smaller networks with larger ISPs, and the anticipated consolidation in the industry. It also touches on innovative solutions like software-based options from companies like X3T/Strategic Imperatives that aim to simplify the provision and consumption of wholesale services.

Its clear a lot of effort has gone into this report from Eight Advisory. It provides a a comprehensive roadmap for Altnets aiming to increase their market penetration and profitability. By focusing on strategic engagement, refining their retail propositions, maintaining consistent marketing efforts, and exploring both wholesale and retail strategies, Altnets can significantly improve their take-up rates.

Max Walker

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