The alternative view
Will the 100+ altnets eventually boil down to only one? Not according to the CEO of altnet GoFibre, whose company is delivering full-fibre services to customers in the north of England and Scotland. Neil Conaghan agrees that market consolidation is inevitable, but that there’s still space for a number of altnets to compete long-term with Openreach and Virgin Media.
He believes there are two main factors that are driving consolidation. “There are lots of places where there is already too much altnet competition,” he said. “So, you have got consolidation to remove competition out of the market and to take excess cost out of the industry as a whole.”
The second big factor is consolidation itself – smaller networks are coming together because they don’t want to be left out of the frame when the bigger networks start shopping around. “There’s a received wisdom that you need to have something in the order of 500,000 ready-forservice homes to be a meaningful size and a meaningful participant in consolidation.
“People don’t want to be the tail-end Charlie,” he added. But that doesn’t mean there’s not a future for a strong, independent network – even if Openreach eventually turns up in the areas that it already covers, according to Conaghan. “It is still possible to make a good business out of a two-player market,” he said.
But it’s not just a two-player battle when Openreach turns up – Openreach wholesales its network to huge household names such as Sky, TalkTalk and, of course, BT/EE. How does a smaller network take on the big beasts in the long run? By being different, according to Conaghan. “We position ourselves differently,” he said. “We provide local customer service. We are we’re very much positioned as hyperlocal. We are very active in the communities where we are present.”
That includes a “Go Further Fund” where GoFibre provides funding for local charities that are also active in the local communities. The challenge of competing against Openreach and national ISPs is “very, very, very well understood,” Conaghan added. “The way that we do business is different.
“That still doesn’t mean it’s going to be easy; it’s never going to be easy,” he said. “But I think we’ve got an interesting proposition and our customers seem to be in agreement with that at the moment. We have a very fast-growing customer base and a good trajectory going into 2024. I’m feeling pretty good about it.”