UK super-fast altnets starting to find their niche

A report from Point Topic finds that smaller network operators are beginning to find a niche for high-speed broadband services in the UK, despite BT and Virgin Media gaining real scale with their own market-dominating services.

Although not all altnets will be successful, some are expected to find that a varied and localised approach can prosper as they bring super-fast broadband to individual communities that have often been struggling with access to even the most basic of broadband services.

The report predicts that alternative operators in the UK have increased their residential customer base by 85 per cent since the middle of 2011, and had around 8,400 fibre-based super-fast end-user connections at the end of last year. These include fibre-to-the-premises, fibre-to-the-building and fibre-to-the-cabinet providers.

“This connections number is small fry compared with the big network owners BT and Virgin Media, but it is highly significant for the communities being reached, some of which would otherwise run the risk of being left without super-fast broadband, at least for some years to come,” said Annelise Berendt, Senior Analyst at Point Topic.

“There is evidence, including from BT, that take up of super-fast services is highest in those areas previously experiencing poor speeds of 2Mbps or below, and this bodes well for those addressing such markets and aiming to make the business case stake up.”

A recent Point Topic survey found that some of the altnets working closely with specific communities are seeing strong results, both in terms of getting infrastructure in the ground and in getting customers onto their networks.

“Players such as Call Flow Solutions and Rutland Telecom using sub loop unbundling to provide fibre-to-the-cabinet solutions are building solid customer bases in the areas in which they are active,” added Berendt. “That is in small but not necessarily very remote communities, which tend to be located some distance from their serving BT exchange, and which are often prepared to put money into network rollout themselves.

“Local knowledge of potential demand and the geographical terrain, as well as being able to tap into local enthusiasm for broadband provision, are essential to getting these networks up and running. Indeed it is no surprise that several local authorities are recruiting ‘broadband champions’ to canvas support and demand registration for their Local Broadband Plans, and to feed back ideas from the ground up. It is also notable that new approaches to raising finance and negotiations with local land owners on wayleaves help to turn a desired deployment into a viable business venture.”

Point Topic predicts that initiatives to make the growing number of scattered alternative networks more readily available to the country’s Internet service providers and especially the larger more well known brands will become increasingly valid as the numbers of these networks rise.

“Fluidata’s wholesale platform and the Quality Marque being developed by INCA, the Independent Networks Cooperative Association, are good examples of projects that could make a real difference to the ability of these altnets to flourish over the longer term.”

Point Topic’s research also highlights the innovative use of alternative backhaul networks. FibreSpeed in Wales and NYnet in North Yorkshire are each being used by Internet service providers to bring their offerings to more remote communities.

Meanwhile, players such as AB Internet and Netserve in Wales through the ‘FibreSpeed spreads its wings’ initiative, and Moorsweb and LN Communications through the Connecting North Yorkshire project, are using wireless technologies to provide broadband.

“While not as high speed as fibre networks, improvements in wireless broadband capabilities are resulting in some premises receiving super-fast speeds. And of course such offerings would not be possible were it not for access to affordable backhaul provision,” concluded Berendt.