Contributed Article
by Rajiv Datta, CEO of nexfibre
In today’s digital age, full-fibre broadband is much more than a faster way to browse the internet; it is the backbone of our modern lives and a critical driver for economic growth. Connectivity has become an essential that touches nearly every aspect of our daily routines. A robust fibre market fuels the broader economy by enhancing productivity, fostering innovation, and making the UK more competitive on the global stage.
Any healthy and successful sector of the economy needs nationwide competition. To achieve this, there must be an appropriate balance of regulation that encourages fair competition, restricts anti-competitive behaviour by dominant players, and fosters a stable environment for investment and innovation. In the UK, the wholesale fibre access market has witnessed remarkable progress in recent years. However, this advancement remains precarious, and significant challenges still need to be addressed to ensure long-term sustainability.
A fibre market fit for the future?
The UK fibre market has come a long way, largely driven by the rise of alternative network providers (altnets). These new players have injected much-needed competition into the market, prompting Openreach, the dominant provider, to accelerate its fibre-to-the-home (FTTH) rollout. This is a positive development, but it is crucial to understand that the progress made is fragile and far from assured.
While the current landscape might seem robust, the underlying market structure is not sustainable in its current form. This was a point I made on the “Changing Landscape of the UK Fibre Market” panel at Connected Britain. The upcoming Telecoms Access Review (TAR) arrives at a critical moment and the regulator needs to take action to promote sustainable nationwide competition.
Significant progress, yet much more to accomplish
According to Ofcom’s latest data, the UK has reached 60% fibre coverage. Continued investment is essential to complete this transformation, and fostering sustainable, nationwide competition is key to maintaining momentum—not just for the current generation of technology, but for future advancements as well.
Stability attracts investment
Regulatory stability is crucial for attracting the necessary investment to complete the fibre rollout. Investors are more inclined to commit resources when they are confident that the regulatory environment is fair, predictable, and supportive of competition. A stable regulatory framework is essential to expanding and upgrading fibre networks across the country.
The need for market consolidation
The economics of fixed infrastructure mean there is room for only a small number of sustainable operators in the marketplace. High-interest rates are exerting increasing financial pressure on sub-scale altnets, many of which struggle with low penetration rates and have to juggle both retail and wholesale operations. Given these dynamics, consolidation in the market is both inevitable and necessary.
Working towards a sustainable future
At nexfibre, we are working closely and constructively with the regulator and policymakers to help shape a fibre market that benefits all stakeholders. We exist to provide that sustainable, nationwide competition and act as a platform for progress in the digital infrastructure market.
This commitment is backed by substantial investment. nexfibre is investing £1 billion in broadband infrastructure this year, reinforcing our intent to provide long-term competition in the full fibre market on a national scale, particularly in underserved areas. We are on track to reach 2 million premises before the end of the year, and with network expansion activities ramping up significantly, nexfibre is set to become the second-largest altnet in just our second year of operation.
Connectivity contributes to better outcomes for all
Genuine, lasting competition to Openreach will drive economic growth, help the UK realise its digital potential, and ensure it remains competitive on the global stage. Moreover, it will transform broadband access across the UK, closing the digital divide and reducing regional disparities across the UK. When this happens, everyone benefits—from individual consumers to businesses and the economy at large.
The UK fibre market stands at a crossroads
Despite the challenges facing the market today, I am confident they can be overcome if we create a dynamic market environment conducive to competition and progress. I’ve had productive discussions here at Connected Britain and look forward to continuing to work constructively with policymakers, Ofcom, and the rest of the industry as we move towards a digital infrastructure that is fit for the future.
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