Winners, Losers and the Race to Scale
Incumbents like Openreach and Virgin Media O2 have fared best, leveraging existing networks and customer bases to maintain dominance. Openreach’s ~17 million FTTP premises and 35% uptake contrast sharply with the fragmented altnet sector, where even the largest players – like CityFibre and Hyperoptic – struggle to reach double-digit market share. Meanwhile, smaller operators are caught in a bind: competing in already crowded postcodes while facing rising costs and dwindling capital. For many, the only viable path forward is to consolidate or be acquired.
Why Money is Drying Up
From 2020 to 2022, UK fibre was awash with funding. But higher interest rates and tougher scrutiny have dried up fresh capital. In early 2025, only one notable funding round closed – a modest £6m for a rural provider. Investors, once enamoured with rollout speed, now demand breakeven timelines and operational efficiency. The shift has been brutal: build rates are down, staff are being cut, and networks once viewed as growth darlings are entering administration. Those unable to demonstrate credible unit economics are finding themselves shut out of capital markets.
The Shape of the Shakeout
Consolidation is no longer theoretical; it is the dominant industry trend. Some combinations, like Netomnia and brsk or FullFibre and Zzoomm, are proactive mergers of equals aiming to scale efficiently. Others, such as CityFibre’s acquisition of Lit Fibre, are strategic absorptions via equity swaps. Virgin Media O2’s acquisition of Upp shows that incumbents are also opportunistic buyers. Then there are the fire-sales: failed altnets like Broadway Partners and Spring Fibre sold for pennies on the pound. In this shake-out, stronger players are hoovering up assets while weaker ones vanish.
What Europe Teaches Us
The UK is not the first country to face a fibre consolidation wave. France’s market was rationalised through strategic mergers and sustained investor backing. Spain consolidated quickly and decisively, while Germany’s slow policy coordination delayed rationalisation. The Nordics adopted infrastructure-sharing early, avoiding excessive duplication. The UK can learn from each: scale matters, policy coherence helps, and infrastructure sharing can avoid waste. These lessons offer a template for avoiding prolonged fragmentation.
Strategic Choices for Stakeholders
Altnet operators must focus on boosting take-up, rationalising costs and achieving regional dominance – or else find partners to merge with. Incumbents will continue acquiring selectively, particularly in non-overlapping areas. Investors with multiple fibre holdings are now active portfolio managers, pushing mergers to salvage value. Lenders, meanwhile, are more cautious – financing only those with proven business models or government guarantees. The pressure to demonstrate real returns is reshaping behaviour across the board.
