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The CEO (Mark Tomlinson) of small but profitable alternative network provider Country Connect has told Richard Tang, CEO of UK ISP Zen Internet, that they’re aiming to extend their full fibre (FTTP) broadband network to reach 20,000 premises by the end of 2026 (currently at c.10k RFS) and have plans to go wholesale. But if you want to buy the network, £10m will do it.
The provider, which has previously described itself as being an unashamedly “micro-entity altnet”, originally started its network build in the Welsh village of Ponthir and town of Caerleon. Shortly after that they began expanding into Usk, Tidenham + Stroat (border villages in Gloucestershire), Penywaun, Llancayo (site of their HQ) and Aberdare. Since then, they’ve also expanded into the Welsh Valleys of Penywaun, Hiruwaun, Trenant, plus the village of Bordon in Hampshire (England).
According to Mark, a seasoned engineer and software developer who started the business because he was tired of having slow ADSL broadband at home, Country Connect is unique in the current altnet market in that their build has been entirely funded by reinvesting profits from other areas of the business (i.e. as well as FTTP, they also deliver managed services, enterprise connectivity and other things).
The downside of this organic growth model is that “ultimately it’s not a scalable model” (hence only 10k premises passed), said Mark, “but it’s working for us“. The upside is that you don’t have any of the usual funding traps that come from having external shareholders with big debt and equity injections, which means that Country Connect is already profitable and “has been for a long time” (company accounts).
Build costs, take-up and overbuild
Mark states that Country Connect’s model, while smaller-scale, should still be sustainable for the “long term“, and they only build in areas where it’s possible to run their fibre via Openreach’s existing cable ducts and poles (PIA). As a result of this and other things, such as buying kit from auctions and mostly using in-house engineers, their average build cost is said to be £180 – one of the lowest in the industry.
The figure actually ranges from £120 – £130 and goes up to £210 when you include customer connections (i.e. final drop with ONT installs etc.). But we dare say that Grain, and a couple of other altnets, might also claim to have the lowest FTTP build costs too.
Elsewhere, Mark noted that they had experienced some significant fibre overbuild by nexfibre (Virgin Media) in around 35% to 40% of their patch, but interestingly this actually had a positive impact on take-up. The reason is that VM/nexfibre “caused a lot of frustration within the community with the way they did it with contractors” and as a consequence Country Connect “actually saw orders continue to go up“. The provider did initially lose a couple of customers to Virgin Media, but they ended up coming back later.
Prices and wholesale
Currently, customers of the service tend to pay from £30 per month for a 300Mbps (symmetric) fixed price package with both free installation and a free Wi-Fi 6 router, which rises to £40 for their top 900Mbps service. The ISP also offers a “social tariff” for those on benefits, which gives you symmetric speeds of 50Mbps on a 6-month term for just £15 per month.
Interestingly, despite already doing some fairly competitive pricing, Mark says they’re “not the cheapest“, but adds that they’re also “not looking to race to the bottom like some providers are and I do think that broadband prices will mature over the next few years, because the altnets like us are using price as a way to onboard customers at the moment.” But that won’t last forever.
Mark concluded by noting that they now had plans to both open their existing network up to wholesale access by rival ISPs and also to reach more of the UK by harnessing rival FTTP networks at wholesale. Country Connect is talking to a number of potential partners about doing this, including Zen Internet, the Fibre Cafe and others. But a clear launch date is not yet known.
Finally, Mark said that they hadn’t done much work with the Government’s Building Digital UK (BDUK) programme (either gigabit vouchers or subsidy contracts) as they found the organisation “really challenging” to deal with (a not uncommon gripe from altnets). We’re “just doing our own thing“, said Mark, before joking – in a half-serious way – that if somebody like CityFibre or Netomnia wanted to buy them for £10m then “I’d probably take it.” Check out the full interview below.