With UK comms regulator Ofcom set to release its Telecoms Access Review (TAR), with the objective of maintaining investment in the roll-out of full-fibre in the country, broadband provider Nexfibre has published a report outlining a series of recommendations to maintain a regulatory environment that it said best supported investment in fixed telecoms networks and promoted sustainable competition, restraining anticompetitive behaviour from market leader Openreach.
At its outset, the report, UK fibre: A fork in the road, notes that connectivity infrastructure underpins the UK’s digital ambitions and supports every sector in achieving growth and innovation across every sector, and in turn is an important enabler of the Labour government’s central mission to deliver a stronger, more inclusive economy.
Yet it added that the full-fibre market is highly fragmented, characterised by a large number of sub-scale operators with low customer and revenue numbers, which combined with financing pressures has seen network roll-out slow dramatically in 2024. Moreover, Nexfibre argued the development of the UK’s digital infrastructure was at a critical juncture, and Ofcom’s TAR will have a profound impact on investment, competition and consumers for years to come.
The review sets out the regulations that will apply to the UK fixed telecoms markets from April 2026 until March 2031, and seeks to ensure the UK’s broadband infrastructure is fit for the future, aiming to set the right environment to promote competition and investment in gigabit-capable broadband, and deliver better services and more choice to consumers.
The Nexfibre report sets out the regulatory conditions that the joint venture broadband provider said were needed for the full-fibre market to flourish and for infrastructure roll-out to continue at pace. Specifically, to create the right conditions for national-scale fibre infrastructure competition, Nexfibre argued that Ofcom must address five key issues, mainly centred around BT broadband provision division Openreach.
First, it says Ofcom needs to maintain regulation on the dominant operator whose “significant” market power, said Nexfibre, requires continued regulation to support the development of sustainable, long-term competition. It also wanted to introduce a margin squeeze test – or economic replicability test – to prevent harmful pricing schemes and ensure fair competition.
Improving physical infrastructure access (PIA) was another demand, to address transparency and cost-sharing issues in the regulation of BT Openreach’s PIA infrastructure charges and support investment.
Finally, Nexfibre called on Ofcom to ensure appropriate regulation for BT Openreach’s copper to fibre network migration to promote competition, and take a pragmatic view of network numbers and consolidation, focusing on supporting long-term sustainable competition at a national scale through consolidation.
“The UK has made terrific progress in expanding full-fibre broadband in recent years, thanks in part to the conditions created by the last Ofcom review, including PIA sharing,” said Giles Rowbotham, Nexfibre general counsel and chief development officer. “However, this progress is fragile. The current market structure is unsustainable, and the Ofcom review comes at a pivotal moment for this country’s digital infrastructure market.
“Roll-out progress in recent years has been driven partly by the emergence of a large number of sub scale altnets, many of whom are now in a moment of real difficulty, with restricted access to new capital and higher financing costs,” he said. “To overcome these issues, we are urging Ofcom to prioritise measures that boost sustainable scaled competition on the one hand and do more to restrain anti-competitive activity from the dominant operator on the other.
“To ensure innovation and investment in digital infrastructure and drive fibre roll-out progress, the UK needs a regulatory environment that balances the need for stable regulation with a pragmatic view of market consolidation, and also takes a firm hand in restricting behaviour that stymies meaningful nationwide competition,” said Rowbotham.
