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Data: Altnets growing market share

April 27, 2021

Data from research firm Point Topic indicate that the collective efforts of altnets and challenger ISPs could see nearly 1 million additional broadband customers using an altnet or challenger ISP by the end of 2025, increasing market share from 12 per cent currently to 14.5 per cent or 3.75 million customers.

The data, commissioned by TV and WiFi Mesh services ISP partner Netgem, includes altnets deploying full fibre, gigabit broadband across the UK, as well as long-standing ISPs such as Shell Energy, Zen Internet and Origin Broadband who resell wholesale services from the likes of Openreach. They are all competing against the Big Four household names of BT, Sky, Virgin Media and TalkTalk, who account for around 90 per cent of consumer connections.

Much in the same way that new entrants in the energy industry such as Octopus Energy or Ovo have disrupted and rapidly gained share, this growing group of ISPs are growing fast and grabbing customers from the incumbents, as Fibre Broadband has become the ‘fourth utility’.

Altnets are spearheading a UK broadband revolution, with a wide range of operators investing billions in upgrading networks locally, regionally and nationally to full fibre broadband. According to Point Topic data, these efforts will help make full fibre available to 85 per cent of the population by 2025, a massive increase from 26 per cent at the end of 2020.

Yet despite all the positive news of planned activity and billions of pounds of investment from altnets, there is a risk they could lose their early mover advantage. BT is planning to roll out full fibre to 15 million customers by 2025, Virgin Media is upgrading its network to increase its national footprint, and there will be plenty of overbuild between the traditional operators and altnets themselves in the more lucrative towns and cities.

As altnets and challenger ISPs face genuine full fibre and gigabit competition from the established names, against each other, and against FTTC services that are advertised as ‘fibre’, how can they realise the opportunity, moving from premises passed to signing up and delivering for customers?

With increased competition, offering triple or quad play services and other value add will be key to getting the most out of their gigabit connection and ensuring altnets and challenger ISPs continue to compete with the more established names. Government is actively looking at options to boost gigabit broadband take up through GigaTag, but companies such as Netgem are already helping ISPs take on the more established names through value adds such as:

  • TV content and services, to help compete with the Big 4 consumer ISPs who offer TV services. Netgem partners with over 15 ISPs in the UK to provide an end-to-end TV service that it says offers the best AVoD and SVoD at an affordable price, offering brand association with Amazon Prime, BBC iPlayer and more
  • WiFi Mesh products that guarantee broadband is both fast and reliable throughout the home – something critical to home-working over the past 12 months and going forward, and a real opportunity for ISPs to monetise and reduce pressures on customer service teams

“To make the most of the gigabit broadband revolution, altnet and challenger ISPs need to think about offering customers more ways to get the most out of their faster connection as they make the jump from copper to fibre and the leap from household names to newer entrants,” advises Netgem UK CCO Shan Eisenberg. “This could help make growth projections even higher than the data suggests. In fact we now have market evidence that attachment rates of 50 per cent can be reached for both TV and whole home WiFi allowing ISPs to increase both their fishing pool and ARPU, and in turn smash their growth targets.”

“These are exciting times for broadband in the UK as operators really ramp up their full fibre infrastructure upgrade,” added Oliver Johnson, CEO Point Topic. “As we move towards widespread gigabit broadband availability in the next few years, providers should take advantage of value-added services to help customers get the most out of their connection.”

Altnet and Challenger ISPs predicted growth

Q3 2020 Q4 2021 Q4 2022 Q4 2023 Q4 2024 Q4 2025
Altnet & challenger ISPs consumer connections 2,811,018 3,023,336 3,197,019 3,380,379 3,549,256 3,744,352
Altnet & challenger ISPs market share 11.90 per cent 12.60 per cent 13.10 per cent 13.60 per cent 14.00 per cent 14.50 per cent
Altnet Full Fibre connections 740,000 1,060,000 1,440,000 1,890,000 2,440,000 3,190,000
UK Full fibre  per cent availability: 26 per cent 35 per cent 45 per cent 56 per cent 69 per cent 85 per cent

Source: Point Topic, November 2020 Market Report

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