Network operator nexfibre, which is working alongside UK ISP partner Virgin Media to deploy a new 10Gbps full fibre broadband (FTTP) network across over 5 million premises (2m have already been built), has today set out its list of recommendations for Ofcom to consider adopting as part of their forthcoming Telecoms Access Review 2026 (TAR).
Just to recap. Back in 2022 Telefónica, Liberty Global and InfraVia Capital Partners setup nexfibre as a new £4.5bn joint venture (here), which aims to deploy an open access (wholesale) full fibre network to reach “up to” 7 million UK homes (starting with 5m by 2026) in areas NOT served by Virgin Media’s own network of 16m+ premises. The funding reflects £3.3bn of fully underwritten financing and up to £1.4bn in equity commitments.
Suffice to say that they have a big interest in the regulator’s imminent Telecoms Access Review 2026 (TAR) – a wide-ranging market study, which is typically only conducted every 5-years and will usually look to make changes that “promote competition and investment” in gigabit broadband and business connectivity. But such things are always easier said than done, with vested interests frequently clashing.
So far, we’ve already seen various alternative network (altnet) providers (here) and even Openreach (here) setting out what changes they think Ofcom’s TAR should make. But today it was nexfibre’s turn, with the operator setting out a series of recommendations under their new ‘UK Fibre: A Fork In the Road‘ (PDF) report, which they see as being necessary to help “maintain a regulatory environment that best supports investment in fixed telecoms networks and sustainable infrastructure competition in the UK“.
“The full fibre market is highly fragmented, characterised by a large number of sub-scale operators with low customer and revenue numbers, which combined with financing pressures has seen network roll out slow dramatically this year,” said the report, before setting out its list of the “regulatory conditions” needed for the “full fibre market to flourish and for infrastructure roll out to continue at pace“.
Nexfibre Calls on Ofcom to Address the Following Issues:
1. Maintain regulation on the dominant operator: the dominant operator’s significant market power requires continued regulation to support the development of sustainable, long-term competition.
2. Address anti-competitive behaviour: Introduce a new margin squeeze test (Economic Replicability Test) to prevent harmful pricing schemes and ensure fair competition.
3. Improve PIA regulation: Address transparency and cost-sharing issues in the regulation of BT Openreach’s PIA infrastructure charges to support investment.
4. Assess copper switch-off impact: Ensure appropriate regulation for BT Openreach’s copper to fibre network migration to promote competition.
5. Take a pragmatic view of network numbers and consolidation: Focus on supporting long term sustainable competition at a national scale through consolidation.
Many of nexfibre’s points above align with those of other altnets, particularly around fears related to the possibility of future FTTP price cuts from Openreach (i.e. making it even harder for rivals to grow and attract fresh investment) and of Ofcom potentially softening the incumbent’s regulation as rising competition has naturally weakened Openreach’s impact over the wider market. The latter also feeds into nexfibre’s call for improvements in PIA regulation, which relates to the product that allows rivals to run fibre via Openreach’s existing cable ducts and poles.
On copper switch off, nexfibre are not referencing the ongoing PSTN/WLR to digital phone migrations, but rather Openreach’s future move to close thousands of old telephone exchanges (mostly occurring after 2030) and migrating related customers from copper to full fibre lines (something that is already occurring, albeit more organically). Nexfibre wants to ensure that rivals aren’t unfairly penalised by this process and that Ofcom conducts a deeper assessment of the approach being taken.
However, despite echoing many of the same points of view as other altnets, nexfibre remains quick to highlight how “a large number of sub scale altnets … are now in a moment of real difficulty” (i.e. due to issues with rising build costs, high interest rates and thus difficulties being able to access fresh investment).
Certainly, we have seen plenty of altnets suffering build pauses, slowdowns and job losses, although there’s no guarantee that some of this won’t impact nexfibre further down the line too. The wholesale model they’ve adopted currently only works with Virgin Media (anchor tenant), which over the past year has had its own difficulties with adding new broadband customers, and it remains to be seen how effective they will be when more ISPs are added.
Giles Rowbotham, General Counsel and Chief Development Officer of nexfibre, said:
“The UK has made terrific progress in expanding full fibre broadband in recent years, thanks in part to the conditions created by the last Ofcom review, including PIA sharing. However, this progress is fragile. The current market structure is unsustainable and the Ofcom review comes at a pivotal moment for this country’s digital infrastructure market. Roll out progress in recent years has been driven partly by the emergence of a large number of sub scale altnets, many of whom are now in a moment of real difficulty, with restricted access to new capital and higher financing costs.
To overcome these issues, we are urging Ofcom to prioritise measures that boost sustainable scaled competition on the one hand and do more to restrain anti-competitive activity from the dominant operator on the other. To ensure innovation and investment in digital infrastructure and drive fibre rollout progress, the UK needs a regulatory environment that balances the need for stable regulation with a pragmatic view of market consolidation and also takes a firm hand in restricting behaviour that stymies meaningful nationwide competition. This is essential not only for the growth of our digital economy and the future of the broadband market, but also to the government’s central mission of delivering higher economic growth, which will create opportunities for communities, people and businesses across the UK.
We look forward to continuing to collaborate with regulators and policymakers ahead of the upcoming Telecoms Access Review to ensure a digital infrastructure market that is competitive, resilient and delivers the economic growth the country needs.”
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