UK altnet market ‘entering its most dangerous phase yet’

Even though the footprint of the UK’s alternative broadband providers (altnets) has doubled in less than two years, the sector is now moving from expansion to survival, with several operators facing commercial pressure that could trigger an expected consolidation wave, a study from Intelligens Consulting has found.

The State of the UK fibre market 2025 report revealed that the UK broadband market is on the brink of its biggest shakeout yet, as the industry shifts from rapid expansion to targeted, commercially grounded fibre investment.

Intelligens Consulting said the altnet sector had quietly doubled in under two years. Indeed, when it published its 2024 update, UK altnets had passed just over 8.6 million premises. By late 2025, that figure has grown to around 16 million, which the analyst described as “an extraordinary” increase delivered despite rising costs, slowing build rates and investor caution.

Altnets now account for around 57% of all UK fibre-to-the-premises (FTTP) deployments, according to the study, with three firms – CityFibre, Netomnia and nexfibre – anchoring the independent fibre sector and driving the majority of new coverage. In addition, several operators have moved significantly up or down the rankings over the past year, with Lightspeed, F&W Networks and G.Network dropping out of the top 10, replaced by nexfibre, FullFibre/Zzoomm, Trooli and Freedom Fibre (including VXFibre).

Yet even with the rapid growth in altnet footprint and sector investment surging to £21.3bn, defying predictions of a slowdown, the study flagged several signs that the roll-out momentum is slowing, with take-up rates varying from 4% to almost 50%. This sparked concerns over the long-term viability of several operators, according to Intelligens Consulting.

The study found that the UK now sits at an average 2.44 fibre networks per household, raising fresh questions about overbuild, competition and sustainability. The report showed UK broadband leader Openreach was now passing 1.1 million premises per quarter, with take-up exceeding 50% in older cohorts, further squeezing altnet competitiveness. At the same time, nexfibre’s rise from nowhere to become a top-three builder in just 12 months was said to have intensified competitive pressure and reshaped the national roll-out map.

The altnet market has never been bigger – or more fragile. 2026 will be a make-or-break year. Those who fail to differentiate, partner smartly, or rethink their commercial strategy will not survive

These changes are regarded in the study as reflecting the stronger capital positions, faster build momentum and more decisive strategies of the rising operators. And while predictions of a merger wave have persisted for years, outside a handful of transactions, such as CityFibre acquiring Connexin, the market remains fragmented. Most operators are still pursuing independent strategies, although several face growing financial pressure and are pursuing crowdfunding solutions instead. The analyst suggested that while decisions may finally be forced in 2026, for now, the sector remains unconsolidated.

Commenting on the report, Intelligens Consulting managing partner Iqbal Singh Bedi said the altnet industry had arrived at a “make-or-break moment” for the UK fibre industry as a whole.

“The market has never been bigger – or more fragile,” he said. “Some operators are winning with strong brands and 30-50% take-up. Others are stuck in single-digit traction. 2026 will be a make-or-break year. Those who fail to differentiate, partner smartly, or rethink their commercial strategy will not survive.”

Looking forward, the study noted that one of the most striking findings was the role local authorities will play in the next phase of growth. Indeed, local authorities were cited as being critical to survival for companies. “We’re now past the land-grab era,” said Bedi. “Sustainable growth will come from smarter, place-based partnerships. Councils and operators must collaborate to reduce build risk, accelerate take-up and align fibre with smart place ambitions.”

In conclusion, the research said altnet survival will now depend on take-up, operational efficiency and commercial discipline, and not sheer roll-out volume. The long-expected consolidation will likely begin with those whose take-up, funding or strategy lags the market’s direction of travel. The likely winners will be those that build where it matters, invest where returns can be realised and collaborate where value can be unlocked.