CEO of UK ISP Zen Internet Talks Alternative Broadband Networks

The boss of UK ISP Zen Internet, Richard Tang, has given an interesting new interview in which he’s quizzed by the CEO of Freedom Fibre, Neil McArthur, on the state of the market for alternative networks and what such operators need to do in order to attract more ISPs to their platforms.

Just for some context. Freedom Fibre is itself an alternative network, which, after recently merging with VX FIBER (here), has now covered 300,000 premises (27th Mar 2024) across the United Kingdom with their full fibre (FTTP) network. Richard Tang actually interviewed the operator’s CEO, Neil McArthur, almost a year ago (here) and the latest interview reverses that position, with Neil being the one asking the questions.

The full interview doesn’t offer up much in the way of surprises, but it is quite interesting to watch and confirms that Zen are in “discussions” with a number of operators about onboarding their networks. “We’re having discussions, including with [Freedom Fibre], about possibilities, and I think that’s the right thing to do,” said Richard.

However, Richard also remarked upon the difficulty of choosing who to onboard, particularly while the market is going through a period of consolidation. “Let’s say we’ve integrated with 3, 4 or 5 altnets in that time. Where does it leave us. You know, have we backed the right horses, have we backed four horses that end up.. after doing all that work, now we’re just going to switch off the network because actually it’s now a combined integration,” mused Richard.

The situation could be a costly problem for a retail ISP, but Richard also sees the sunny side as, in the above scenario, they’d now be in the best position to adapt to that change through pre-existing integration. On this point, Richard suggests that waiting until a later date, after all the consolidation has already happened (i.e. pick the winning horse), could instead mean missing out on all that earlier opportunity to grow.

Neil then asks Richard what alternative broadband networks should do in order to attract more retail ISPs to their wholesale platforms, which causes Richard to highlight two key points – 1) Create a “compelling set of commercials” (pricing etc.), and 2) “Just make the integration as easy as possible” (e.g. copy a standard API like the one Openreach or CityFibre uses, thus making it easier for ISPs to adopt).

In addition, Richard confirms that Zen has expressed an interest to CityFibre, albeit not the only retail provider to do so, in acquiring the customer base of Lit Fibre after the altnet has finished integrating the new network. CityFibre recently acquired Lit Fibre’s UK FTTP network (here), but as a wholesale-only provider they have already acknowledged that, in the future, they may need to divest the retail base to avoid a conflict.

Speaking of consolidation, Freedom Fibre’s CEO noted how consolidation can be a slow and complex process to deliver effectively. “It’s going to take us 12 months to make that network [Freedom Fibre and VX FIBER] look like one and deliver the entire suit of products seamlessly,” said Neil.

Finally, Neil touches on Ofcom’s One Touch Switch (OTS) system, which is supposed to make it easier and quicker for consumers to switch between UK broadband ISPs on different network platforms, but it has suffered from significant delays (i.e. it was originally planned to launch in April 2023 and now won’t go live until 12th September 2024, which is still somewhat of a tentative target).

“It’s been massive within Zen,” said Richard. “[OTS] used up multiple teams of software developers, multiple months for us to get ready for that [original] March 2024 [launch] deadline. Then just as it was approaching, it got moved back to September. In terms of impact upon the business, I think it will be beneficial for Zen because on the whole customers like our service, so if they can switch to it more easily from competitors then that will be more of a benefit than the downside of customers who want to switch away from Zen.”

The full interview goes on to cover many more areas, such as the PSTN / WLR switch-off, and is available to view here. We’ll also embed it directly below once it goes fully live.