“ There’ s no shortage of fibre in the ground, but the returns aren’ t adding up.” – Christophe Firth, Kearney
considers such requests. To incentivise further investment and maintain momentum for the rollout, Ofcom has published how it will regulate the wholesale broadband markets from April 2026 to March 2031. DECISIONS. Ofcom’ s decisions include:
• Supporting competition. Openreach’ s competitors will continue to have access to its ducts and poles at fair, cost-based prices, meaning they can deploy their own networks quickly and economically across the UK.
• Protecting quality of service in less densely populated parts of the UK, where Openreach is unlikely to face competition, Ofcom is introducing new backstop standards around the speed and quality of repairs and installations for Openreach’ s full-fibre services. Elsewhere, we expect competition to drive service quality.
• Acting on affordability. Ofcom will cap
the nominal price that Openreach can charge retail providers such as Vodafone or Sky – who lease its infrastructure – for download speeds up to 80Mbit / s, rather than 40Mbit / s at present. The prices of higher-speed products will remain unregulated, so providers have an incentive to invest in networks that can deliver faster speeds.
• Closing the copper network. As part of transitioning to full-fibre networks and gradually shutting down old telephone exchanges, Openreach should not have to incur unnecessary costs for running two networks at the same time. Ofcom will progressively shift regulation away from copper services to full fibre services, giving Openreach flexibility to encourage customers to migrate off its old copper network.
• Looking to the future. If sustainable competition is still emerging in 2031, when our next review is due to take place, Ofcom expects to regulate in a way that supports it. Should we need to set price controls on Openreach in the future, it would have the opportunity to earn a return above the cost of its investment over time. Alternatively, if effective competition emerges by the time of our next review, there will be no need for Ofcom to regulate beyond access to ducts and poles. The decisions take effect from April 2026. SHORTFALL. Meanwhile, fibre rollout across Europe is falling short of operators’ financial expectations. Kearney’ s latest European Telecom Health Index shows that in slow-adopter markets – Italy, the Netherlands, Poland, Ireland and Denmark – returns on capital employed( ROCE) have dropped to 6 %, with fibre take-up closer to 45 %.
By contrast, high-performing markets such as Sweden, Norway, France, Spain and Portugal are achieving fibre take-up of up to 84 %, supporting significantly stronger returns of 11 %.
At the same time, Europe faces a € 174 billion funding shortfall to meet its 2030 gigabit and 5G targets. Without this step-up in investment, around 45 million Europeans could remain without adequate high-speed connectivity by the end of the decade.
Kearney surveyed 20,000 consumers across 21 European countries and found that demand-side behaviour is the main barrier to fibre monetisation. In the bottom-five markets, including the UK, customers are 7 % more likely to switch providers, 10 % more likely to demand faster speeds, and 6 % more likely to demand better customer service compared with those in stronger markets. SENTIMENT. By contrast, the top-five countries – Sweden, Norway, France, Spain and Portugal – record significantly higher sentiment. Customers are 11 % more satisfied with their mobile provider, 13 % more satisfied with fixed broadband, and 13 % more likely to hold multiple mobile subscriptions with the same provider. Stronger customer relationships also deliver better financial outcomes. In top-performing markets, operators see average revenue per user( ARPU) rise by up to 15 %, while customer turnover drops by 10-15 %.
Kearney’ s Index shows Europe’ s healthiest telecom markets are concentrated in the north, with Norway( 82), Sweden( 81) and Switzerland( 76) leading the rankings. These countries combine strong fibre adoption, higher customer satisfaction and stronger commercial outcomes.
At the other end of the scale, the UK sits among Europe’ s weakest performers, ranking 18th out of 20 markets. Despite years of rapid fibre rollout, the UK struggles with slow adoption and weaker customer sentiment, reflected in lower bundling levels of just 28 %.
Industry consolidation
InfraVia, Liberty Global and Telefónica are to acquire Substantial Group for £ 2 billion(€ 2.3bn) through their nexfibre JV.
Founded in 2019, Substantial Group, owned by investors Advencap, DigitalBridge and Soho Square Capital, is the UK’ s second largest alternative fibre provider, expected to have more than 3.4m fibre premises and over 500,000 customers by completion. The acquisition will be made by the parties’ joint venture company, nexfibre, and will unlock £ 3.5 billion of investment in the UK market.
The combination of nexfibre, Substantial Group’ s fibre network( Netomnia) and the customers on 2.1m Virgin Media O2 premises( which will be upgraded to fibre by nexfibre), will create a scaled, financially secure challenger to BT Openreach, with a full fibre footprint of around eight million premises by the end of 2027. When combined with the growing fibre footprint of Virgin Media O2, co-owned by Liberty Global and Telefónica, the two networks will collectively reach 20 million premises and give internet service providers a highly attractive wholesale alternative to the incumbent.
Infravia, Liberty Global and Telefónica are committing £ 1 billion in new net funding for nexfibre to fund the transaction – made up of £ 850m from Infravia and £ 150 million jointly from Liberty Global and Telefónica, with Virgin Media O2 committing traffic on 4.6m overlapping and adjacent homes.
In a joint statement, Vincent Levita, Founder & CEO, InfraVia Capital Partners, Mike Fries, Chairman & CEO, Liberty Global and Marc Murtra, Chairman & CEO, Telefónica said:“ By bringing our strengths together, we are creating a scaled and financially secure wholesale fibre challenger to BT Openreach – one that will enhance competition, strengthen the UK’ s digital infrastructure and deliver greater choice and quality for consumers and businesses.”
“ This transaction unlocks £ 3.5 billion in international investment and reflects our shared confidence in the UK as a highly attractive market for long-term investment, supported by the government’ s economic policies. We are committed to accelerating full-fibre coverage and helping ensure the UK remains competitive and ready for the future.
EUROMEDIA 11