Ofcom plans to support AltNets facing bankruptcy is a ‘red flag for the industry.’
Ofcom is considering contingency plans to help full-fibre alternative internet providers (AltNets) fight off the threat of bankruptcy due to runaway inflation.
Millions of UK homes and business premises receive broadband directly from an independent service provider. CityFibre, one of the UK’s biggest AltNets, supplies high-speed broadband to over 1 million homes in 25 towns and cities.
A large number of bankruptcies among the smaller broadband firms would leave customers without connectivity or an alternative provider, increasing the risk of digital exclusion.
Under the measures proposed by Ofcom, which are still in the early stages of discussion, Ofcom would become a supplier of last resort, offering support to struggling firms and ensuring customers are not left without internet or a broadband supplier.
“We keep a close eye on the broadband market to make sure we know what’s happening on the ground,” said an Ofcom spokesperson. “Usually, when a network company fails, it’s sold as a going concern, and customers don’t experience a loss of service.”
“In the event that a network suddenly failed and ceased to provide services, we would work with alternative suppliers to help customers get reconnected as quickly as possible. This could be through Openreach or an alternative provider, depending on the circumstances.”
A report in the Daily Telegraph suggested that Ofcom’s concerns are a bad sign for the AltNet market. In a piece titled, “Households brace for internet blackout from wave of bankruptcies,” Ben Woods wrote, “It seems to be a bit of a red flashing light that Ofcom is thinking about it at all. During economic downturns, the sheer number of smaller companies cannot be entirely sustainable when you already have big network builders.”
Jarlath Finnegan, CEO of Giganet, was one of the first AltNet voices to respond. He believes the AltNet space is looking better than ever and is essential to the UK’s future economic growth and prosperity:
“There will always be winners and losers in emerging markets. And the economic forecasts suggest a challenging time ahead for all industries; it’s unfair to single out the AltNets.”
“Without the AltNets, the future-proofing of the nation’s digital infrastructure will suffer. As customers grapple with inflation and rising living costs, our flexible contracts and promise to abolish exit fees and mid-contract price rises are more important than ever.”
“Like so many other firms building new networks, we’re delivering on our plan and have full confidence in our business, industry, and our ambitions for the future.”
