The UK’s alternative network providers (altnets) emerged around 2018 and, supported by billions in investment, dramatically accelerated the country’s fibre rollout. Today, superfast fibre is available to over 40% of homes and businesses, bringing the sector closer to the government’s 96% coverage goal for 2027.
However, major incumbents—prompted by competition and government pressure—are launching their own fibre plans. Coupled with an uncertain economy and more cautious investors, these shifts have made the operating environment tougher for many altnets.
To better understand the landscape, Neos Networks surveyed 100 altnet executives across the UK about the main challenges and their strategic responses.
Competition, cash flow, and regulatory friction
One of the industry’s biggest frustrations is duplication of infrastructure: in many areas multiple providers are laying fibre in the same streets. That competition benefits consumers but creates a difficult sales environment for altnets trying to win customers.
More than half (55%) of respondents said the primary obstacle is customers already tied into contracts with large providers. Established brands such as BT, Sky and Virgin Media inspire recognition and trust, and many customers view switching to a newer provider as inconvenient—or risky—even when switching schemes exist. In addition, many altnets focus on broadband only, while incumbents can bundle broadband with TV, mobile and other services, making their offers more attractive.
Building networks has also become more expensive, increasing the urgency of securing subscribers quickly. Investors now typically demand evidence of committed customers before funding projects. Nearly half (46%) of altnets reported that securing finance has become harder in the past year. High interest rates were cited by 48% as a barrier, while regulatory complexity and tighter lending rules were each blamed by 41%.
Another strain comes from the planned retirement of BT’s copper network, which leaves coverage gaps that are costly for altnets to remedy—an average shortfall of around £1.4 million per operator in affected areas.
Altnets also remain concerned about the market position of Openreach. Many respondents flagged tactics by larger incumbents as discouraging private investment.
Lee Myall, CEO of Neos Networks, explained: “Our altnet partners have been very clear about some of the structural challenges that deter competition and limit private investment in key regions. For example, Openreach sometimes announces FTTP expansion plans for specific areas without firm deployment timelines. That discourages altnets and investors from committing to those areas, as they fear being undercut by a later Openreach rollout. In many cases, those announced deployments were then delayed or deprioritised.”
Altnets fight back
Altnets are responding proactively. Their top priorities are retaining customers (56%), improving network performance (44%) and expanding service offerings (43%). They recognise that superior customer service alone may no longer be sufficient to win market share.
Partnerships feature prominently in their strategies. Over half (52%) are pursuing partnerships to accelerate customer acquisition, and 43% see partnerships as a route to reach new areas. With the economics of building new fibre everywhere becoming less attractive, collaborating with other providers is often the smarter approach.
Strategic alliances with major retail brands such as Sky or TalkTalk are planned by 56% of respondents, while 48% are considering deals with wholesale network providers. These arrangements mirror successful examples already in the market. Fewer altnets (36%) plan to partner with other altnets—likely reflecting the challenge of achieving the roughly 35% customer take-up threshold many projects require to be commercially viable.
Growth strategies also focus on revenue diversification. Altnets are exploring additional services to increase average revenue per user and differentiate from incumbents.
Popular add-ons include smart home devices (46%), business connectivity services (43%) and security systems (42%). Some operators have already seen strong results from bundled offerings; for example, providers that combine broadband with TV and security have reported significant customer growth.
Technology adoption is another competitive lever. Over half (53%) of altnets are embracing modern network technologies—such as software-defined networking (SDN) and network functions virtualization (NFV)—which improve flexibility and lower operating costs compared with legacy systems. Investments in private networks, 5G integration and AI-driven automation are also underway to boost service quality and operational efficiency.
To succeed, altnets must remain agile: forging the right partnerships, broadening service portfolios, adopting modern technologies and maintaining a strong customer focus. Decisions made now will influence the shape of UK internet access for years to come.
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