LONDON, UK, 1st May 2025
One of the UK’s foremost business connectivity providers, Neos Networks, has today announced research from 100 Senior Decision Makers at UK-based alternative network providers (Altnets). It reveals that almost all (96%) are considering M&A and partnerships with other service providers as they look for opportunities to survive and expand in the UK’s competitive broadband market.
A competitive landscape
The research, conducted by Censuswide this year, highlights some of the hurdles that many Altnets face. When asked about acquiring customers, 55% said their target customers are ‘locked into preexisting contacts’, a clear indicator of the growing competitive pressure from legacy providers. This was followed by a lack of awareness (47%), with many Altnets facing competition with up to four other providers in regions where they have networks.
Tough economic conditions are also affecting growth strategies with Altnets, with almost half (48%) of those surveyed saying that it has been difficult to access funding over the past year. High interest rates are exacerbating this challenge with 48% of Altnets citing them as the primary reason behind their struggle for funding. Regulatory constraints and strict lending criteria were also cited as significant barriers as Altnets looked to secure financing.
Altnets also face other regulatory challenges, including the knock-on impact of BT’s closure of its copper network as it transitions to full fibre. As part of this modernisation, most Altnets are now under pressure to remove equipment from BT’s exchanges, which are due to start closing in January 2027. They say it will cost them, on average, £1.4mn, according to our research.
The path forward
As Altnets look for a path forward, almost all (98%) said they expect to move beyond just offering traditional residential broadband to broaden their services and appeal. This was also cited as the number one long-term ambition for Altnets in the survey.
- 46% say they plan to launch smart home technology
- 43% say they will offer enterprise connectivity
- 42% say they will launch security solutions and packages
- 35% say will start offering multi-service solutions – i.e. TV and entertainment
55% of the Altnets we surveyed say that improving customer satisfaction is their primary goal for the next few years, beating out other, more revenue-critical operations such as increasing customer subscriptions and driving operational efficiencies.
When asked what technologies they were using to help them differentiate themselves from their competitors, the majority of respondents said they were deploying Software-Defined Networking and Network Function Virtualisation (53%). 5G Fixed Wireless Access (39%), and AI/ML enabled BSS/BSS automation also ranked highly.
Lee Myall, CEO at Neos Networks said: “Altnets have played a pivotal role in reshaping the UK’s connectivity landscape, driving the expansion of full-fibre networks and challenging established incumbents. However, the industry now stands at a crucial crossroads. Heightened competition, financial pressures, and shifting regulatory frameworks mean that Altnets must evolve rapidly to secure their long-term future.
“Our research highlights that Altnets are exploring a variety of strategies – from mergers and acquisitions to strategic partnerships and service diversification – to strengthen their market position and pave the way for sustainable growth.”
Methodology
Neos Networks commissioned Censuswide to survey 100 Senior Decision Makers at UK-based Altnets. The survey was commissioned in January 2025. The full report can be read here.
