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Anonymous sources speaking to ISPreview say the two altnets are considering combining their operations “in the next 4–6 weeks”
This week, a new report says that two the UK’s major altnets could be set to merge, in a move that would create a combined company covering over 1 million premises with fibre-to-the-premise (FTTP).
According to anonymous industry insiders, discussions are currently underway that could result in the companies combining their networks “in the next 4–6 weeks”.
The combination would make some logical sense. As ISPreview points out, the companies share a mutual investor in the form of Adveap and also have a relatively similar approach to fibre deployment, focussing heavily on cost-effective deployment via accessing Openreach’s existing infrastructure.
Their rollouts too are broadly complementary, with little existing overlap between the two networks.
Brsk has covered 450,000 premises with FTTP, primarily around Birmingham, Manchester, Bradford, Rochdale, Blackburn, and Burnley. Netomnia’s rollout, on the other hand, is much broader, having covered 850,000 premises with locations throughout the UK.
If combined, the two companies would therefore have access to around 1.3 million premises across the UK, making it a considerable force in the country’s broadband market.
Consolidation of the UK fibre market is gradually picking up steam. While rumours of Virgin Media O2 (VMO2) buying CityFibre last year ultimately came to nought, there has been a considerable amount of movement in the market over the past 12 months: Trooli was acquired by a newly formed Agnar UK Infrastructure; CityFibre acquired Lit Fibre from Newlight Partners; and Nexfibre – the joint venture owned by Liberty Global and Telefónica, and 50% owned by InfraVia Capital Partners – joined forces with its sister company VMO2 to acquire Upp, to name but a few.
Perhaps the biggest move for the altnet market so far is perhaps not strictly M&A, but rather restructuring, with investment Fern Trading consolidating all of its altnet investments – Giganet, Swish Fibre, Jurassic Fibre, and AllPoints Fibre – into a single entity, trading under the Cuckoo brand.
No doubt we can expect to see more consolidation over the rest of the year, with the altnets struggling to battle difficult macroeconomic conditions as well as typically low levels of take up for full fibre services.
Speaking of the latter, part of the problem for consumers is that the process of switching to a new provider can be a daunting, lengthy endeavour. Ofcom has tried to combat this by mandating the introduction of One Touch Switching (OTS), but so far BT (Openreach) and VMO2 have struggled to implement the process, leading to heavy delays.
Earlier this month, Netomnia CEO Jeremy Chelot expressed his dissatisfaction with Openreach and VMO2 on the matter, saying that even Ofcom’s latest revised deadlines may not be feasible.
Chelot is speaking on a panel on this very topic at the Connected North conference in Manchester next week.
How is consolidation impacting the UK’s altnet market? Join the operators in discussion at this year’s live Connected North conference
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