Summary Bullets:

• BT CEO’s comments about competitors’ fiber rollouts as “ending in tears” was a faux pas, even if accurately reflecting the market is overdue for consolidation.

• Multiple fiber providers are shedding engineers. Market sharks will be circling to acquire fiber assets as competition takes its toll on an oversupplied supply side.

The injudicious, but possibly accurate in many cases, comment by BT CEO Philip Jansen that Openreach’s broadband network rollout had turned into an “unstoppable machine” and that competitors’ efforts “would end in tears” was not seen as his best commentary to date. In an interview with the Financial Times in February 2023, he says, “There is only going to be one national network. Why do you need to have multiple providers?”

Although Jansen has subsequently said that there would likely be two or three national fiber players, the message is deeply misjudged as it sounds like the monopolist thinking of a former incumbent – always the first thing competitors, commentators, and politicians/regulators will jump on.

However, the tears may be starting to fall. BT itself plans to cut from 40,000 to 55,000 posts in total over the coming years, including 15,000 engineers involved in fiber network rollout and 10,000 others in maintenance as the new networks will be more reliable and require less looking after.

Outside of BT, other job cuts have been announced or reported – mainly engineers where network rollout has been completed or put on pause. These job losses include Virgin Media O2 (up to 2,000), CityFibre (400), Hyperoptic (100), Zzoomm (300), Jurassic Fibre (60), Lightspeed Broadband (19), Swish Fibre (80), G.Network (200)… the list goes on.

To be fair, this is a consequence of a number of factors: Once the engineering is done, service providers’ focus will turn to sales and support. Also, the market is hyper-competitive – perhaps the strangest thing has been the lack of consolidation to date, but the sharks may just be waiting to pick up assets at pennies in the pound as and when companies go bust. In a market where the only survivors will either have critical mass (say, over 25% market share nationally or 40+% locally) or a clear differentiator (e.g., excellent customer service, value-added services, access to key niche anchor customers like local government) means that a phase of merger and acquisition activity will come sooner rather than later.