Original article ISPreview UK:
The Managing Director of Regulation at UK broadband operator Openreach (BT), Mark Shurmer, has called on Ofcom to ensure that they soften market regulation on them in areas of the UK deemed to be competitive due to the presence of either Virgin Media’s fixed broadband network or those where there are three or more full fibre (FTTP) network providers present.
At present Openreach is already deemed by Ofcom to hold Significant Market Power (SMP) in a number of the UK’s markets and thus faces a variety of rules to address the competition concerns that arise as a result. This includes various price controls, the need to ensure fair access for rivals to run new fibre via their existing cable ducts / poles (PIA), Dark Fibre Access (DFA), restrictions on broadband discounts and Quality of Service (QoS) standards etc.
NOTE: Openreach’s Fibre-to-the-Premises (FTTP) broadband ISP network already covers nearly 20 million premises and they’re investing up to £15bn to hit 25m by December 2026, before reaching “up to” 30 million by 2030.
The regulator recognises that some areas are more competitive than others, and so scales their rules by geography. For example, areas where competition is deemed to be sufficiently well-established or effective (Area 1) will benefit Openreach through the removal of regulation (the regulator did not to identify any such areas at their last review), while partially competitive areas (Area 2 – 70% of the UK) see softer regulation and uncompetitive areas (Area 3 – 30%) – where only Openreach is present – see the toughest rules.
However, earlier this year Ofcom began their Telecoms Access Review 2026 (TAR), which is a wide-ranging market study – conducted every 5-years – that is looking to make changes that “promote competition and investment” in gigabit broadband and business connectivity. But such things are always easier said than done, with vested interests frequently clashing between different players.
One of the issues to arise from this surround the debate over how Ofcom defines competition between different areas. Once again the new review, perhaps somewhat surprisingly, chose not to define any areas “where competition is sufficiently well-established or effective” (Area 1). But it did propose to redefine Area 2 to reflect 90% of the UK (up from 70%) and Area 3 to reflect 10% (down from 30%).
The changes reflect today’s fluid market, where in many areas Openreach now faces competition from more than just Virgin Media (inc. nexfibre), including a wide mix of alternative networks (Summary of UK Full Fibre Builds). But the likes of CityFibre, Netomnia, CommunityFibre, Hyperoptic, FullFibre and Gigaclear have had some of the biggest impacts. On the flip side, many altnets are today suffering a slowdown or even stall due to the strained economic climate (i.e. high interest rates, rising build costs and competition etc.).
Despite this, Openreach’s Mark Shurmer told the FT (paywall) that restrictions on them should be loosened by Ofcom in areas where there were three alternative providers, or in places where Virgin Media was present. Ofcom said in March 2025 that competition in the sector would “take time to become sustainable”, but Shurmer disagrees. “You’re talking about Virgin Media O2, a well-established operator, or CityFibre, funded by [Abu Dhabi] sovereign wealth fund [Mubadala] and Goldman Sachs,” he said.
The pain points fuelling Shurmer’s position are easy to see. As noted in our H1 2025 Broadband Coverage report, altnets were found to have covered 42.26% of the UK with FTTP broadband by the end of H1 2025 (up from 39.38% in H2 2024). At the same time, Openreach’s most recent quarterly results noted that broadband line losses to rivals had hit 169k (albeit down from 243k in the prior quarter). The caveat here is that most of their line losses come from areas where they’ve yet to deploy FTTP, thus any suggestion of scaling back their roll-out may carry other risks.
Shurmer thus warns that Openreach may struggle to meet its provisional target of covering 30 million homes with full fibre broadband by 2030 if Ofcom sticks with existing measures. On the flip side, altnets argue that competition is still in the process of being established, and some are also unhappy about the revised definitions for Area 2 and 3.
For example, Gigaclear recently warned Ofcom that Area 3 is now “far too small” (here) and highlighted how “just because an altnet has built it, doesn’t immediately make it commercially viable for two operators“. As usual, everybody is fighting from their own corners of vested interest and the regulator has the difficult task of finding a balance.
In the end, both sides make valid points, but excluding Virgin Media (inc. nexfibre), competition in the UK’s full fibre market is still a patchwork of smaller players that is in the slow process of consolidating itself toward a hopefully more cohesive and effective structure for the future.
The problem with any transitional market is that we can’t yet see for certain exactly where it will end up, which does at least suggest that Ofcom must be very careful not to upset the apple cart too much this time around (bigger changes may have to wait until 2031). The regulator is due to set out their final proposals for TAR 2026 in the very near future.
