Summary Bullets:

• The UK’s Competition and Market Authority released its interim findings on nexfibre’s proposed acquisition of Netomnia, in which it raised concerns that the acquisition could reduce wholesale competition.

• Deploying multiple overlapping networks have put smaller altnets under financial pressure, with consolidation seemingly the only way forward.

It’s been humorously said that the UK has roughly one altnet for every postcode – well over 100 to be exact – each armed with big ambitions and a digger. It’s therefore no surprise that consolidation is now firmly on the agenda, with M&A activity set to reshape the alternative network landscape. The market that emerges could look very different from the landscape we see today. With the UK’s Competition and Markets Authority (CMA) releasing its interim findings on nexfibre’s proposed acquisition of Netomnia, raising concerns that the deal could reduce wholesale competition, particularly where the two networks overlap. Yet consolidation could create a larger stronger challenger to take on BT’s Openreach. Though this raises the broader question: Does the UK need more fiber networks, or fewer but stronger networks capable of competing at scale with Openreach?

The CMA’s interim findings highlight a fundamental tension in the UK fiber market. Where nexfibre and Netomnia’s networks overlap, the proposed acquisition would remove a wholesale infrastructure competitor, potentially reducing choice for broadband providers and reducing the competitive pressure on wholesale services and pricing. The CMA’s alternative scenario, in which CityFibre acquires Netomnia, would retain three significant competing infrastructure providers in these areas: Openreach, nexfibre, and CityFibre.

However, nexfibre argues that consolidation would create a larger and financially stronger alternative to Openreach, providing greater scale to invest in network expansion and provide real competition for wholesale customers. The issue therefore extends beyond having more networks. The bigger question is where the UK is better served bymultiple smaller infrastructure providers, or by fewer but stronger operators capable of competing at scale.

The fiber market in the UK has been shifting from network deployments to consolidation. After years of investment by alternative network operators, it has contributed to increased competition with Openreach and has expanded the choice available to consumers. However, the economics of deploying multiple overlapping networks are becoming more challenging, placing greater emphasis on scale, customer acquisition, and returns. The proposed nexfibre-Netomnia transaction could therefore represent a pivotal moment for the sector, providing an early test of whether this altnet model can deliver sustainable returns or whether consolidation becomes a consequence of market maturity.

Looking at other international markets, there is no single blueprint for wholesale fiber infrastructure. New Zealand has four regulated fiber wholesalers, but their networks are largely geographically complementary, limiting direct infrastructure overlap. France has taken a more fragmented approach, with multiple private and regional infrastructure operators supporting wholesale access. The UK, by contrast, has deliberately encouraged Openreach, CityFibre, and altnets to build on top of one another, using infrastructure overlap to increase competition. This makes the acquisition decision strategically important for the future structure of the UK fiber market. Too much consolidation could weaken wholesale competition, while excessive fragmentation could leave operators without the scale, capital, and customer base required to generate sustainable returns and challenge Openreach effectively.

Whatever the CMA decides, it will set a precedent for the wave of potential altnet deals to come:

• If the deal is approved, nexfibre gains the scale to become a credible national challenger to Openreach, but overlapping areas lose an independent competitor.

• If the deal is blocked, wholesale customers keep more choice of infrastructure provider, but the financial pressure on smaller players may persist, and the eventual consolidation could be messier.

The CMA is weighing more infrastructure players against stronger infrastructure competitors. The UK has spent a decade proving it can build multiple fiber networks. The harder task now is proving it can sustain them, and the answer may be fewer networks, each far stronger.