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The Managing Partner of M&A-focused consultancy firm the Bradley Strategy Group, Rob Bradley, has today spoken to ISPreview as part of a new interview that lifts the lid on the “strategic recalibration” that is currently occurring across the UK’s alternative fibre networks and driving a wave on consolidation to correct for today’s “structurally misaligned market“.
According to figures released by the Independent Networks Co-operative Association (INCA), alternative broadband networks (excluding Openreach, Virgin Media and KCOM) are currently delivering full fibre (FTTP/B) lines to 16.4 million UK premises or 15.2m when overbuild between altnets is removed (here). Some of the biggest players in this space include CityFibre (c.4.5m premises), Netomnia (2.5m), nexfibre (2.2m), Hyperoptic (1.9m) and CommunityFibre (1.5m), but there are many more (Summary of UK Full Fibre Builds).
However, as our regular readers will already know, most altnets are currently looking at consolidation as a way of balancing against the increasingly difficult market conditions that have arisen over the past 2-3 years. Much of the latter has been driven by high interest rates, rising build costs and strong competition – all of which is making it hard to raise fresh investment.
In the past our interviews on this subject have tended to focus on talking to the network operators and retail ISPs themselves. So this time we thought it might be interesting to get the perspective of the Bradley Strategy Group, a boutique strategy consultancy focused on the UK fibre sector, particularly the consolidation of altnets.
The company has previously worked with firms like Fern Trading, Speed Fibre, and CityFibre, and they’re currently advising on multiple real-world mergers and integration plans within the altnet landscape. According to Rob Bradley, Managing Partner of BSG, the current “structurally misaligned” market suffers from having “too many operators, with overlapping footprints and duplicated costs, serving too few customers.” Not to mention that consumers haven’t always had a “compelling reason to switch” or were unaware of the new network choice(s).
“The issue is that the second part of the equation, “build it and they will come”, hasn’t materialised at the speed investors hoped. Take-up is lower than forecast. Operating costs remain high. And with limited revenue flowing in, many operators are now falling short of their own commercial projections, not because they failed to build, but because the expected returns haven’t followed,” said Rob.
In response, many altnets have had to slow or stop their network builds in order to focus on greater commercialisation, which tends to be followed by redundancies. But this has left a market with a lot of smaller players and an inevitable expectation toward more mergers and acquisitions. “For the best-positioned players, this is the time to scale with purpose,” said Rob. “Consolidation is not a last resort, but a strategic enabler, particularly when it leads to stronger commercial focus, platform efficiency, and capital access.”
On the other hand, many deals are still being “stalled by valuation gaps,” with some sellers often holding onto unrealistic valuations, often at the same time as “buyers are pricing based on actual take-up, cost to serve, and integration overhead“. The full interview delves into all of this and covers what altnets get right, what they get wrong and the changes that are needed to deliver a positive outcome.
This is particularly relevant as the next 12–24 months may well materially reshape the market.
The Bradley Strategy Group Interview
1. As a strategy consultancy focused on the UK fibre sector, you’ve worked with various investors and network operators and are currently advising on multiple real-world mergers and integration plans within the AltNet landscape.
Suffice to say that you no doubt have quite a strong insight into the current trend toward greater market consolidation between operators. So far this has got off to a bit of a slow-ish start (i.e. a good chunk of early consolidation has been more internal, between companies owned by a single shared investor). But I understand you’re expecting consolidation to pickup over the next 12-24 months.
Is the expected acceleration primarily because the wider economic strains are catching up with operators that have been trying to hold it back and, past a certain point, they may have little choice but to consolidate?
Rob Bradley said:
Yes, survival is now a central force, but the full picture is more than just financial distress. What we’re seeing is a strategic recalibration across the UK fibre landscape.
The capital that underpinned the initial wave of AltNet activity has largely been deployed. Most operators were backed with a clear mandate: build as fast as possible, hit premises targets, and trust that commercial traction would follow. So they built. But today, many of those plans have either completed, been exhausted, or are now facing refinancing risk, as debt providers reassess their exposure to the sector in a very different economic climate.
The issue is that the second part of the equation, “build it and they will come”, hasn’t materialised at the speed investors hoped. Take-up is lower than forecast. Operating costs remain high. And with limited revenue flowing in, many operators are now falling short of their own commercial projections, not because they failed to build, but because the expected returns haven’t followed.
We now face a structurally misaligned market: too many operators, with overlapping footprints and duplicated costs, serving too few customers. Mathematically and operationally, the sector needs fewer players covering larger areas. That’s the only way to drive unit cost efficiencies and deliver sustainable commercial returns.
So why didn’t the “gold rush” happen?
Because consumers haven’t had a compelling reason to switch. Many households still receive 40–60 Mbps over FTTC, speeds that remain sufficient for typical usage. And those broadband lines are often bundled with mobile, TV, or content services that increase stickiness. Switching to full fibre, especially via an AltNet, can feel disruptive: drilling walls, digging drives, changing contracts, and potentially losing bundle benefits. In the absence of a pressing use case or financial incentive, inertia wins.
Crucially, we never removed the legacy alternative. In Singapore, copper was retired as fibre rolled out, creating system-driven urgency. In New Zealand, a regulated copper withdrawal code is supporting fibre migration, region by region. In the UK, however, fibre and copper continue to coexist, and Openreach’s PSTN switch-off doesn’t eliminate copper broadband. Without regulatory push or consumer pull, there’s no tension driving the switch, and adoption lags.
This has exposed a key weakness in many early AltNet business plans: optimistic assumptions around exclusivity of footprint, rapid take-up, switching behaviour, and long-term infrastructure value. Those assumptions haven’t held, and investor focus is now shifting: from coverage to conversion, from homes passed to homes connected.
Capital hasn’t disappeared, it’s just chasing different outcomes. Monetisation, cost-to-serve, and platform resilience now matter more than build metrics. Investors are asking tougher questions about ARPU, customer lifetime value, and the operational gearing of each platform.
As a result, we’re seeing the maturation of investor logic. Early consolidation moves, often within single portfolios, were about stabilising positions. But the next wave of transactions will require real strategic intent: platform integration, footprint rationalisation, systems alignment, and brand consolidation.
And those deals are much harder. They demand not just capital, but capability: deep integration planning, shared technology architecture, operating model transformation, and culture alignment. This is no longer a volume game, it’s a capability race.
So yes, financial pressure is accelerating consolidation. But what we’re really witnessing is a correction to the business model. A moment of reckoning, yes, but also one of opportunity. For the best-positioned players, this is the time to scale with purpose.
2. What aspects of consolidation do you see as working in the current market and what’s not?
Rob Bradley said:
The most encouraging development is the shift in mindset. There’s growing recognition that consolidation is not a last resort, but a strategic enabler, particularly when it leads to stronger commercial focus, platform efficiency, and capital access. We’re seeing operators and investors move beyond the early fixation on premises passed, and start to prioritise connections, take-up, and operating leverage, the fundamentals that actually drive value.
Structurally, we’re seeing some smart dealmaking emerge. The CityFibre–Lit Fibre deal is a good example: it was built around technical alignment, a clean equity structure, and a clear integration thesis. The FullFibre–Zzoomm merger showed how combining mid-sized footprints can push a business past key scale thresholds, creating the kind of operational and financial profile that attracts further investment.
What’s also working is the recognition that aligned systems and architectures make a material difference. When platforms are compatible, whether CRM, OSS, or provisioning, integration timelines shorten, complexity reduces, and value is unlocked faster. Consolidation is no longer just about acquiring fibre in the ground; it’s about acquiring capability.
On the other hand, many deals are still being stalled by valuation gaps. Sellers often hold onto pre-2022 expectations, while buyers are pricing based on actual take-up, cost to serve, and integration overhead. Without creative structures, like equity rollovers or staged consideration, that gap is difficult to close.
And even when deals are agreed, integration remains the single most underestimated challenge. Differences in systems, data models, provisioning logic, and even support processes can introduce real operational risk if not planned for early. The best consolidation strategies are now building integration plans before the deal closes, not after.
In short, what’s working is commercial discipline, architectural alignment, and creative structuring. What’s not is late-stage integration planning and valuation rigidity. The more consolidation is approached with clear execution intent, not just financial ambition, the more successful it becomes.
3. What do you see as the key barriers for consolidation, which are still in play today?
Rob Bradley said:
While the strategic logic for consolidation is now widely accepted, scale efficiencies, rationalised footprints, shared systems, the barriers to action remain stubbornly real.
Capital structure misalignment
Many AltNets are still backed by investors with different timelines, return profiles, and governance structures. Some are open to equity-based combinations; others are debt-laden and focused on refinancing. This divergence creates friction: deals that make strategic sense often fail on financial alignment.
Valuation expectation gaps
Founders and investors are often anchored to valuations set during the peak of the market, typically based on homes passed or funded build, not on revenue or take-up. Buyers, meanwhile, are now pricing deals on penetration, EBITDA, and commercial traction. The gap between these views of value can delay or derail deal-making, especially for underperforming networks.
Pre-consolidation posturing
There is a growing awareness across the sector that consolidation is inevitable, but without widespread cash deals, many fear being subsumed on terms that understate their potential. This leads to strategic positioning: some operators may delay engagement, pursue additional growth, or extend their footprint to enhance value ahead of potential talks. While understandable, this can unintentionally slow down the consolidation.
Transactional and governance complexity
What often looks like a straightforward commercial merger on the surface hides a deep layer of structural complexity. Many AltNets are owned via SPVs or holdco arrangements, with minority investors, convertible debt, or waterfall structures that require bespoke legal negotiation. Deals may need shareholder approvals, creditor consents, or the restructuring of security positions. Add to this the need for tax-efficient merger structures, TUPE considerations, and a detailed review of legacy contracts and liabilities, and even aligned parties can take months to execute a transaction. The friction here is not just commercial, it lies in the layered legal, financial, and governance complexities that underpin most transactions.
Integration risk and system complexity
Even when two operators want to merge, the practical complexity of integration can kill momentum. Misaligned OSS/BSS platforms, incompatible provisioning and support models, fragmented customer records, TUPE obligations, and billing architecture mismatches all represent execution risk. Without a clear and costed integration plan, many acquirers walk away.
Lack of neutral, shared platforms
Unlike sectors such as mobile or energy, the UK fibre market lacks a standardised wholesale access framework or common technology backbone. Each network has grown independently, using different architectures and commercial terms. As a result, every merger becomes a custom integration challenge, raising cost, risk, and time.
Unclear regulatory incentives
There is no national mandate or regulatory encouragement to consolidate, no copper switch-off deadline driving urgency, and limited policy intervention to reduce inefficient overbuild. In markets like New Zealand or Singapore, consolidation was structurally enabled. In the UK, it remains voluntary, fragmented, and investor driven.
The biggest challenge isn’t strategic, it’s executional. The sector has a consolidation thesis that makes sense on paper, but getting deals over the line requires navigating valuation tension, legal architecture and operational friction. Without that full-stack view, consolidation risks remaining more aspiration than action.
4. What things do you look to see in a network operator that might, in this climate of rising consolidation, distinguish likely winners from those most at risk?
Rob Bradley said:
I look for six things that distinguish likely winners in today’s climate of consolidation:
Strong unit economics and low debt exposure.
Operators with a healthy debt-to-revenue ratio and prudent capital deployment stand out. High leverage in a high-interest environment limits flexibility and raises exit risk.A leadership team with proven operational and commercial delivery.
Having execs who’ve scaled networks before, whether in fibre, cable, or mobile, brings credibility and hard-earned operational discipline. Experience matters when moving from 10K to 100K customers.A scalable and efficient technology platform.
The ability to add customers without linearly adding headcount or systems complexity is a critical differentiator. We’re particularly interested in whether the operator has clean APIs, modern CRM and billing platforms, and solid provisioning/orchestration, not technical debt and manual workarounds.Thoughtful build strategy with minimal overbuild exposure.
Operators who’ve avoided the most heavily contested urban markets or who have secured demand-side commitments (e.g. council partnerships, anchor tenants) are structurally advantaged. Gross margin is harder to sustain when you’re the third fibre line into a street.Commercial traction, take-up on RFS.
Build is no longer enough. Investors are watching take-up closely. A growing penetration rate is a strong indicator that the go-to-market strategy is working and that the business has real potential for EBITDA breakeven.Experience at Network, systems & organisational integration
As the market consolidates, those who can integrate efficiently across networks, systems, and people, will be best placed to realise the value of their deals. Integration isn’t just a back-office exercise; it’s where synergies are won or lost. Operators with experience aligning architecture, migrating customers, and unifying operating models will move faster, reduce cost, and instil greater investor confidence. In a sector where consolidation is inevitable, integration capability is fast becoming a defining competitive advantage.There is one notable outlier in the market, and that’s CityFibre. Unlike most AltNets, CityFibre has pursued a deliberate scale-first strategy, fuelled primarily through debt. While this approach will inevitably face increasing pressure as capital becomes more expensive, it’s important to acknowledge what the team has achieved: they have built a scaled infrastructure challenger to Openreach in the UK.
No operator is immune to market risk, but CityFibre now appears well-positioned to emerge as one of the long-term winners and a likely centre of gravity in the eventual consolidation of the sector. Their strategic partnerships, including Vodafone, AllPoints Fibre, and, more recently, Sky, provide strong wholesale channels, and their national footprint gives them operational relevance at scale.
The coming years will be critical. The model depends on continued take-up, successful integration of acquired assets, and sustained access to refinancing. But based on current trajectory, CityFibre looks set to play a defining role in the UK’s fibre future.
Please flick over to Page 2 in order to finish reading the interview.