Matthew Howett, founder and chief executive of telecoms research group Assembly said this “could well be the first domino to fall in terms of an altnet being bought by one of the big players.”
“The UK broadband market is set to enter an era of scaled connectivity challengers, after first a period of dominance from the incumbent followed by a proliferation of altnets,” he added.
Virgin Media O2 to snap up Russian oligarch-backed broadband firm
While the circumstances behind the sale of Upp are relatively unique, observers believe that many of the more than 100 so-called “alt nets” – mostly small broadband providers rolling out services across the country – will be snapped up by the biggest telecoms players as market conditions get tougher.
“Alt nets are a key piece of the connectivity jigsaw, but consolidation has been inevitable as new sources of funding dry up, focus on take-up intensifies and investors increasingly demand returns,” said Matthew Howett, the founder and chief executive at Assembly Research.
“Today’s announcement could well be the first domino to fall in terms of an alt net being bought by one of the big players.”
Virgin Media O2 buys Russian-backed broadband provider
The deal is one of the first big signs of consolidation among “altnet” broadband providers by the large infrastructure groups that many analysts have been predicting.
Matthew Howett, analyst at telecoms research group Assembly, said: “Altnets are a key piece of the connectivity jigsaw, but consolidation has been inevitable as new sources of funding dry up, focus on take-up intensifies and investors increasingly demand returns.”
UK telecoms groups under fire for adding inflation ‘premium’ to bills
According to a study by Assembly Research, a research company, commissioned by Virgin Media O2, average monthly household spending on telecoms services has fallen by almost one-fifth since 2017.
The report also found that the telecoms industry was investing up to £2.5bn a year in mobile networks, and about £3.8bn into fixed broadband. It estimated that combined capital expenditure accounted for nearly 70 per cent of total investment made by some of the largest industry players.
UK in danger of falling behind on 5G network rollout, analysts warn
Mobile industry executives highlight the decision of Boris Johnson’s government in 2020 to strip Huawei out of Britain’s nascent 5G networks because of national security concerns as a reason for the slow rollout.
“That absolutely put the brakes on deployment for the operators,” Matthew Howett, chief executive of Assembly Research, said.
