Ofcom needs to look at how it can foster competition and a strong investment environment within the altnet sector in its upcoming telecoms access review (TAR).
That’s the call from Malcolm Corbett, founder of the Independent Networks Cooperative Association (INCA), which represents the non-incumbents altnet sector and operators.
Corbett said it was critical for Ofcom to ensure that the outcome of the TAR, which will be published in early 2026 and comes into force from April 2026 to March 2031, was favourable for altnets in order to maintain a competitive UK wholesale telecoms market.
“The TAR essentially sets the terms of business for future of the altnet sector,” said Corbett. “We firmly believe that Ofcom shouldn’t seek to deregulate BT and Openreach, but rather it needs to look at how they can enable commercial investment in the so-called Geographic Area 3 [hard-to-reach areas] to be sustainable in the long term.
“If the TAR comes out in clear support of a competitive landscape, we will have had a successful result. But if, on the other hand, it is in favour of BT or a duopoly, it’s going to be a far more challenging environment for the altnets.”
Added to that, given BT and Openreach have recovered about £1.2 billion of the cost of building their physical infrastructure access (PIA), the existing infrastructure needed to roll out fibre networks, Corbett has called for no significant rise in its price to ensure the altnets using those services can maintain sustainable pricing need to run the networks. He said that as the regulated entity responsible for exchange closures and the copper switch-off, Openreach also needed to take altnets into account while carrying out those processes.
“If we can all of these things done, competition in the market will become more sustainable in the long term,” said Corbett. “That’s our main wish.”
The establishment of a competitive market enabled by government and regulatory policy has opened the doors to investment and growth of the altnet sector in recent years, said Corbett. But the next challenge, he said, is sustaining that competition, which will be a key focus for the TAR.
“We have been feeding into that process,” said Corbett. “Our mantra is that there should be a fair bet principle applied for all investors and operators, which means they will get a reasonable return.
“That means Ofcom needs to take steps to ensure the current competitive market is sustainable over the long term rather than just having the incumbent or a duopoly of operators who are able to build sustainable networks. So we have engaged external consultants to produce 12 papers on the various aspects of the TAR, all of which are laser-focused on ensuring that the landscape for competitive development is delivered on from a regulatory and policy perspective.”
In terms of the new government, Corbett said that it’s key to quickly get the relevant ministers up to speed on the progress the altnet sector has made and explain why competition is critical for both consumers and the wider country. That includes the establishment of the new fibre networks to drive sustainable economic growth, and provide consumers with more choice and better services and prices, he said.
“It’s key to help them understand the role of the altnet sector and what it needs to deliver on its investments and enable greater private investment,” said Corbett. “In this vein, we’re keen to help government design its new Statement of Strategic Priorities and, therefore, also help to inform Ofcom’s regulatory approach, and have submitted a letter to DSIT to that effect.”
Telegraph issues
Another big issue facing network providers is the need to reduce the amount of telegraph poles being erected in local communities, said Corbett. Where practically possible, he said that altnets should look to share existing infrastructure.
This request has been being given further impetus, said Corbett, by the Minister for Telecoms, Sir Chris Bryant, who, held a round table with network operators at Connected Britain in September to urge greater infrastructure sharing when rolling out new networks. This follows INCA establishing a new group to encourage altnets to share physical infrastructure in order to ease and accelerate the deployment of full fibre across the UK, he said.
INCA also in September launched a new wholesale standards initiative to lower the barriers to business between ISPs and altnets, another drive that Corbett is keen to push. The new scheme is aimed at establishing one clear standard to make it easier for ISPs to buy services from altnets, particularly in regions where they have deployed fibre networks that Openreach will not cover in the short to medium term, he said.
According to INCA’s latest annual report, Corbett said that, since 2017/18, around £25 billion has been invested in the altnet sector – significantly more than BT has invested in Openreach over the same period. But he added that due to more challenging economic and investment conditions, since 2022, there has been a slowdown in building new networks and a greater focus on getting customers onto those networks.
“The biggest challenge is making sure that investors understand that the investments they have been making and are continuing to make in these networks have a good chance of making a fair return,” said Corbett. “Also, that the altnets can attract customers onto their networks, either directly through the retail services they offer in areas they are building networks or increasingly through wholesale, so attracting service providers to deliver to end customers using their networks.”
Given the recent proliferation of altnets, Corbett said that the inevitable focus lately has been on consolidation. While that has been slow to start, he said it’s now starting to gather pace.
“It takes time and can be difficult to integrate altnets post-merger – just look at the cable industry, which took about 20 years to fully consolidate,” said Corbett. “So it’s not going to happen overnight, but we are certainly starting to see more activity.”
Moving forward, Corbett said that the key advantage altnets have over the incumbent, BT, is being able to move quickly and to build and operate networks at a competitive cost base. In addition, he said that they don’t have the burden of having to run a legacy copper network, unlike BT.
“Because their focus is solely on the new fibre networks they are building, they can offer their customers a resilient and high-speed service at competitive prices,” said Corbett. “All in all, it’s a strong customer proposition.”