Nexfibre Calls for Changes to Protect UK Fibre Broadband Market
Network builder nexfibre, which is being supported by UK ISP Virgin Media (O2), has today warned that the progress on rolling out gigabit full fibre (FTTP) broadband networks across the UK remains “fragile” and it wants Ofcom to take “decisive action” to prevent the “mistakes of the past” (i.e. Openreach domination) from being “repeated“.
So far Nexfibre has covered over 1 million premises across the UK with their new network and they’re currently in the process of investing another £1bn during 2024, which should enable them to cover an additional 1 million premises. The project reflects a £4.5bn joint venture between Telefónica, Liberty Global and InfraVia Capital Partners, which was setup in 2022 (here) and shares some of the same parentage with Virgin Media.
The operator’s ultimate aim is to deploy an open access fibre network to reach “up to” 7 million UK homes (starting with 5m by 2026) in areas NOT currently served by Virgin Media’s network of 16m+ premises. But they’re also mindful of how their plans and vested interests could potentially be impacted by Ofcom’s upcoming Telecoms Access Review 2026 (here), which is naturally something they’d want to protect.
As part of this concern, the operator has today published a new report – ‘Platform for progress‘. The report broadly calls on the industry, policymakers and Ofcom to work together in order to focus on “prioritising competition, investment and innovation,” while at the same time avoiding any changes that could cause the UK to “head back to a place where there is a single dominant provider” (i.e. Openreach).
The report advocates for 3 “crucial” areas:
➤ A stable regulatory environment which continues to attract the much-needed investment in the UK’s digital infrastructure. The only way the UK can drive momentum beyond the current roll-out is to ensure a sustainable, competitive market long term.
➤ A regulatory framework which ensures a consistent and equitable playing field for all operators. Regulators and policymakers must restrain anti-competitive behaviour from the incumbent and put in place a regulatory framework which addresses exclusion of competitors.
➤ A market characterised by sustainable competition rather than fragmented sub-scale operators. The UK needs national-scale wholesale competition to secure future progress and generate the right conditions to accelerate innovation and development in the full-fibre market.
The final point above, which seems targeted at smaller alternative networks (Altnets), almost reads like an attempt by nexfibre to have their cake and eat it (i.e. arguing both against a single dominant provider and, at the same time, a patchwork market of smaller altnets). As we said, vested interests are all at play here, given that nexfibre’s build targets the upper middle ground of market scale (5-7m premises).
On the other hand, natural market consolidation is likely to resolve their final point over time and without Ofcom needing to do much, although there will always be some smaller altnets left at the end of that phase – often reflecting those that serve a particular niche or being more of the community benefit model. At the very least, nexfibre won’t want roadblocks being put in the way of that consolidation by the regulator (this isn’t an issue today, while altnets are smaller, but may become a problem at the larger end of the market).
Rajiv Datta, CEO of nexfibre, said:
“I am delighted to publish nexfibre’s ‘Platform for Progress’ report, reflecting on our first year operating in the market and taking a critical look at what is needed to further unlock the sector’s potential.
As we have set out today, the market faces a series of challenges. Some of these have been driven by a historic lack of investment and others have been the result of external factors. All of them can be overcome if we create a dynamic market environment conducive to competition and progress.
I look forward to working with industry partners and policymakers as we move towards delivering digital infrastructure that is fit for the future.”
The press release for this report isn’t particularly helpful in identifying the specific changes that nexfibre may be seeking, although the full report does offer a few insights. For example, it calls for a review of pricing for access to Openreach’s cable ducts and poles (PIA – Physical Infrastructure Access) to resolve “inconsistencies in the way PIA is priced that leads to altnets paying significantly more for ducts and poles than Openreach charges itself,” which is something that a lot of Altnets would support.
The report also lodgeds frustration at the way Openreach discounts prices to attract customers to its own FTTP broadband lines (e.g. Equinox 1 and 2), which is something we’ve covered before (here) and remains a highly contentious topic. Altnets often feel this makes it harder for them to grow and attract fresh investment, while on the flip side, Openreach’s prices are often beaten by Altnets and they naturally want to be able to compete with that.
Nexfibre then proceeds to highlight the importance of Ofcom being able to deliver “regulatory stability“, which we’d agree is, at this stage, a key part of helping to incentivise investment. “Stable, consistent regulation over a long period of time maintains the environment needed to support long term investment horizons,” said the report. On the other hand, there’s not a lot that Ofcom can do about the wider economic challenges, such as high interest rates, which also hamper investment.
Finally, it’s worth noting that nexfibre’s report expresses their network and Virgin Media’s network as being part of a “combined” wholesale platform (at present they’ll still legally separate, despite being about as closely knit as you can get), which they say will serve “over 21 [million] premises” (if nexfibre achieves its full aspiration, this could reach 23 million by 2028). But the catch is that a combined network of this size would also become more subject to Ofcom’s regulations.
“We have a strong partnership with Virgin Media O2, one of the UK’s largest ISPs, and we intend to offer our footprints for wholesale access on a combined basis of over 21M premises. This creates a true national scale alternative, which the market has lacked thus far – making us a natural home for growth-minded ISPs who prioritise quality, stability, and a great customer experience,” said the report.
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and Linkedin.
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I think for the most part they can and should have their cake and eat it. Say 3 national operators e.g. Openreach, Nextfibre/Virgin Media and CityFibre is better than both a single dominant provider like Openreach and a patchwork of local providers. This consolidation is going to happen by itself anyway, I think NF just call for the regulators not to block it. The caveat being they must be truly national operators and consolidation should not be allowed where that would leave people with only 1 option in any given area.
Openreach doesn’t provide service directly to retail customers, it facilitates wholesale connectivity for Communication Providers who are retail facing. Some of the Altnets operate as a wholesale provider, some don’t. If Nexfibre are asking OFCOM to restrain Openreach, so that they can undercut them on wholesale provision, then that isn’t good for competition or consumers.
Yes I’m aware that Openreach et al do not directly service consumers. However, having a choice of infrastructure providers is important to consumers as it determines what products the retail ISPs are able to offer.
“However, having a choice of infrastructure providers is important to consumers as it determines what products the retail ISPs are able to offer.”
Is that really true? The vast majority of consumers have absolutely no interest in the infrastructure, and once you get to symmetric full fibre, what significant difference does it make to the majority of consumers? What I suspect most people would like is a single fibre feed and the ability to switch providers seamlessly and the last thing they want is multiple providers terminating on the property.
I bet they would not complain if it was Virgin Media (O2) domination. I don’t want anyone dominating, this have been the problem in this country for telecoms/broadband for far too many years
Point 1 is already ruled out by the establishment parties. The UK simply is not a good place to invest and looking at all these manifestos and the polls and Exodus is the only word that comes to mind
Point 2 and 3 are contradictory
“The UK needs national-scale wholesale competition to secure future progress and generate the right conditions to accelerate innovation and development in the full-fibre market.”
Both OR and VM have had national scale for years. Neither has wanted to invest because of shareholders. VM XGS and OR FTTP are a direct response to Alt Net competition.
Stop moaning, start investing.
No, get your own haircut.
Sadly equinox 3 will come and Ofcom will approve it. Ofcom are acting like they just needed the alt nets to get the Openreach roll out moving.
Ironically no FTTP competition here. Cityfibre are the only FTTP provider at my location, Openreach isnt planned, although there is VM docsis gigabit services.
I’m stuck with Virgin if I want full fibre. Does the fact that I have this fibre service an excuse not to provide an alternate choice?
When will I get another fibre connection in Kingswood Bristol?
that’s probably better than being stuck with Openreach
my road is the only one in my village that doesn’t have a choice, otherwise I could have symmetric gigabit for what I’m paying for 500Mb with a pathetic 70Mb upload
every other road in the village has two providers, soon to be three
Anonymous,
I’m sure openreach won’t lose any sleep, mate
They know the market better than you!
I hope NextFibre are offering their poles and ducts to smaller AltNers at the same price as OR
They are using PIA for all their rollouts.
3 national networks is probably where we are going to end up. Competition is a good thing but not to the point where no one has a chance of making any money. Also it’s got to better better for small to medium sized ISPs to have a wholesale provider with a national footprint to tempt them away from Openreach, so the consolidation of the altnets into a single wholesale provider has really got to be the way forward. I have say that it’s a bit much to be complaining about Openreach’s PIA access when VMO2/Nexfibre are not offering it themselves.
VM02 and Nexfibre talk boldly about opening up to wholesale (like Openreach), but I think their grand plan is a closed vertical market with consumer lock-in where no alternative exists. Ofcom must ensure they open up a genuine wholesale arm sooner than later.
Nexfibre are currently using Openreach PIA for there rollouts too
So are VMO2 here in Banbury.
Is it just me, or do the words of the entire report look like stuff CityFibre has been writing and saying for years now? Well done nexfibre for coming up with some fresh suggestions! LOL 😉
Exactly what Cityfibre have been saying for years what gives this new altnet the right to have a say in these matters! Wonder how much they pay VM for using their ducts
Is this why BT shares fell today?
I received a letter 6 days ago from SCCI Alphatrack that they are bringing Virgin Media to my area here in Central London!
Apparently my housing estate management EastEndHomes have made this agreement happen even though they have not published it on their website like they did with Community Fibre 3 years ago.
I was very surprised but at the same time wasn’t sure if that was something to be excited about given how expensive they are compared to Community Fibre! I know that SCCI are responsible for our communal TV aerial system here in my building. So, perhaps that’s a reason why a deal has been granted easily.
Nevertheless, it was surprising given the fact that I waited for so long just to get Community Fibre go live last year following a wayleave that happened 20 months before the service had went live. Wayleave at that time was the biggest obstacle and it needed a legislation back then to get Community Fibre having previously had Hyperoptic denied. But Nexfibre coming as a second FTTP is surprising. However, we don’t have Virgin Media, so that explains why they are rolling it out here.
Last night at 12am I saw installation works on the street from my balcony and the map was showing Nexfibre, which was reflective of the letter that the works will start 24th of June. However, these were 2 large vans showing Vorboss and the engineers had Vorboss uniform. I know that Vorboss are usually business installers. But looks like they were contracted to install Nexfibre.
Anyway, having looked at the Gig2 packages, it is difficult to see how Nexfibre and VM are going to attract customers given how much more competitive the Community Fibre packages are. If you can get 3Gbps for £56 with Community Fibre then it’s difficult to see someone paying £70 for Virgin Media Gig2. While Gig1 is £41 Community Fibre is £26.
Nexfibre should be more worried about overbuilding in areas with smaller Altnets than Openreach. If they are really going to do Wholesale they should get ISPs on the network that provide cheaper packages. But something tells me that their intent is to give special favouritism to Virgin Media. I can see why they don’t want Openreach as Openreach will be a hindrance to the new VM monopoly!
We don’t want anyone to become a monopoly. To replace Openreach as the new monopoly is just as bad for consumers! We want similar and reasonable price offers. If they are not, then they are wasting their time building and not getting any customers on the network!
I’m over in Old Ford with Clarion Housing. We got the same letter as you last May (2023). The work was carried out in around 6 weeks, but it only went live a few weeks ago (over a year after the letter). However, my lucky neighbours that live opposite, have had Community Fibre for a few years. 1gb up/down for £26. Sadly, after years of saying on their website that we were next, it suddenly says that they have no plans for my building.
Virgin want £41 for 1gb up, much slower down. They have been to my door a few times. A bit of an attitude from the sales guy which, along with the price and the min 18-month contract, I told them I’d sooner wait for other options. I hear their customer service is abysmal too.
A couple of weeks ago, Openreach announced MILE END exchange is on their list for more FTTP roll out. Not sure how long that will be, but worth the wait (if it means other possibly more affordable options).
I get your point about their pricing, but from what I can gather, the Virgin product was not fitted/offered to my neighbours opposite who already have Community Fibre, I guess because they have full fat fibre?
Anyway, I shall wait, despite being a senior (in age) gamer, and struggling with 60/70mb dl.
I’ll just soldier on haha.