The UK telecoms network is at a tipping point, with altnets poised to increase their market share exponentially over the next 12 months.
That’s according to Andy Conibere, CEO of Trooli, who, in an interview with Zen Internet’s founder and CEO Richard Tang, said all the indicators are that they will continue to grow rapidly, making inroads into Openreach’s customer base.
That’s evidenced by Point Topic’s latest quarterly update for the three months to 30 June, which has reported altnets passed close to 13 million premises and connected 2 million homes.
Added to that, with the 16 biggest altnets currently averaging 15 per cent take-up, Conibere expects that number to rise between 20 and 30 per cent in the next 12 months.
And with BT churning just under 500,000 broadband customers in 2023 and being projected to lose at least 800,000 this year, said Conibere, the altnets will only continue on their current trajectory.
“We are at this point now where the national ISPs are clearly feeling the pain,” said Conibere. “We are going to start to see the national ISPs coming on board with the larger altnet networks, which means that customer take-up is going to be even higher than the initially forecast 2.5 million.
“I’m hoping and expecting that the altnets will make it commercially favourable for the national ISPs to place their business with them rather than with Openreach. The hope too is that when we get to 2026, BT and EE will start to partner with altnets too.”
Zen deal
Trooli itself last month (August) became one of the first independent broadband network operators to sign a wholesale agreement with a national ISP, after agreeing a partnership with Zen. The strategic deal, which has 12 months in the offing, is Zen’s third infrastructure partnership after Openreach and Cityfibre, giving it access to Trooli’s whole full fibre footprint, enabling it to provide internet services to approximately 370,000 homes and businesses in underserved rural and semi-rural regions of England including South West, South East and East Anglia and three counties in Scotland.
Conibere said, “We are delighted to be partnering with Zen, one of the largest retail ISPs in the UK, as our businesses are so well aligned. Our network is ready for service so this new partnership allows Zen Internet to expand its customer reach and quickly connect its customers to a high performing network.
“Our teams are leaders in their field, very experienced at exceeding the needs of wholesale partners and this partnership is a significant step for Trooli’s wholesale business. Unlike many altnets we are continuing to build our network to areas of the UK that will benefit from it the most and are dedicated to the innovation required to provide access to the fastest and most reliable full fibre broadband.”
Partner interfaces
Conibere said that there were four ways partners can interface with Trooli. These include: a service provider portal, direct API integration, through the Fibre Café and, now, indirectly through national ISPs such as Zen, he said.
“Essentially, we are here to make partners’ lives easier by joining out network,” said Conibere. “So we have all the same processes and KPIs that they would expect from Openreach.”
Conibere himself has worked in the telecoms industry from the age of 16. Having joined BT as an apprentice, he worked there for 18 years before deciding to establish his own company, Call Flow, in 2002.
Starting out as a niche wireless ISP (WISP) after seeing a gap in the market to serve a segment that wasn’t receiving broadband, Conibere then moved the company into fibre to the cabinet (FTTC) and very high-speed digital subscriber lines (VDSL). He was then asked by BT to carry out a proof of concept for and to develop its new passive infrastructure access (PIA) product.
“For a number of years Call Flow was the only consumer of PIA and we developed many products,” said Conibere. “As there were no real roadmaps for what fibre networks should look like, we then started to think about how we could build them, which inevitably put us on the journey to full fibre to the home.”
PIA’s evolution
Conibere said that PIA has come a long since its inception. He said that in its early days, the product wasn’t fit for purpose, but it has since evolved into a vastly improved offering in terms of its systems and processes, with a new proof of concept in terms of clearing duct blockages.
“If we were doing a long duct run, we used to have to print out all the duct plans and stick the separate bits of paper together and roll it up like a big toilet roll,” said Conibere. “That’s how we built and reserved out networks.”
Call Flow also became the first company to launch XGS-PON after partnering with Adtran. Then, the company decided to change its name to Trooli to differentiate between its WISP and copper products and its fibre products.
Despite some views to the contrary, Conibere said that Building Digital UK (BDUK), which was set up to help build the country’s digital networks, has represented good value for taxpayers’ money. He said that initially BDUK did a good job of engaging with and subsidising BT’s rollout of FTTC across the UK to the tune of £2 billion, with the company vastly exceeding its take-up projections, thereby ensuring a big chunk of the money was paid back.
Backing BDUK
BDUK came into its own again, said Conibere, during the BT and Virgin duopoly, when it put out for tender a series of proofs of concepts, which opened up the market to altnets. Trooli itself has benefitted from this, winning its first £1.3 million contract to build several proof of concept hybrid networks.
“The learning was very clear to both the government and Ofcom that, left alone, the duopoly of BT and Virgin wasn’t going to innovate,” said Conibere. “So, everything was put in place to enable infrastructure competition through PIA.”
In terms of the current altnet market, Conibere said that the expected consolidation push has hasn’t happen yet, largely due to investors not wanting to make a loss from inefficient operators and to see a return on their investment before they sell. But as customer numbers continue to grow, he expects that to soon change.
“Many of the altnets and their backers are sitting tight right now, looking at the ramp up in customer take-up numbers and hoping they can break even and get their investment back,” said Conibere. “There will, inevitably, be some insolvencies of smaller networks that are losing lots of money, as well as some consolidation of expensive and inefficient networks that realise they need scale to keep going, and smaller operators doing share swaps and merging. Additionally, there will be consolidation of the larger and more efficient operators, dependent on the national ISPs getting on board with the altnets.”
Bright future
As far as his own business is concerned, Conibere said that Trooli has mainly built its network where no others already exists. It has also focused, he said, on rural areas.
“We have tried to second guess where any of our competitors are going to go,” said Conibere. “In hindsight, we have been quite successful in that respect as the majority of our network is still the only gigabit player in town.”
Conibere said that it had passed more than 373,000 premises and was closing in on 400,000, with a long-term target to reach 500,000. Recently, he said that it had further expanded its network with the acquisition of Scotland-based Axione UK.
Such lofty ambitions are what is propelling the UK telecoms network to greater heights. If it’s to continue on that path, greater investment and building work is required, as is market consolidation.
