The Next Chapter in UK Fibre, published by Assembly Research and commissioned by nexfibre, finds that while the last five years of UK fibre rollout have been defined by pace and build, the market must now shift its focus to scale, sustainability and meaningful wholesale competition. According to Ofcom data cited in the report, fibre coverage in the UK has risen from 17% to 78% between 2020 and 2025, with £21.4 billion invested in the period. Despite that progress, Assembly’s analysis finds the financial foundations of many operators to be precarious.

Among the eight largest altnets, EBITDA remains negative for three and only marginally positive for a further two. Free cash flow, which Assembly identifies as the more accurate measure of financial health, is negative for all but one.

CityFibre, one of the largest players in the market, carries total reported liabilities of £5.1 billion, while Hyperoptic and Community Fibre have reported free cash flow losses of over £245 million and £160 million respectively. The report also details recent market failures, including G.Network entering administration in January 2026 before being reorganised under new ownership, and Gigaclear completing a recapitalisation in April 2026 that delivered an estimated 40% haircut to lenders.

Assembly’s analysis frames the causes as structural rather than cyclical. Fragmentation across dozens of sub-scale operators has led to unnecessary network overbuild, constrained investment and limited the ability of retail ISPs to partner with altnets at national scale.

Operators such as Sky and VodafoneThree have so far chosen to partner only with Openreach, CityFibre and Community Fibre, given the operational complexity of engaging with dozens of regional providers across different systems and price points. Assembly argues that this dynamic actively benefits Openreach, which is targeting 30 million premises by 2030 while altnet investment stalls.

The report identifies the proposed acquisition of Netomnia by nexfibre as an example of the consolidation the market requires.

Netomnia reported revenue of £104 million for 2025, a 168% increase on the previous year, alongside a take-up rate of 15% and its first positive EBITDA of £5 million.

With around three million premises passed, its acquisition by nexfibre would bring the combined fibre footprint to approximately eight million premises by the end of 2027, including around 2.1 million Virgin Media O2 premises upgraded to full fibre.

InfraVia Capital Partners, Liberty Global and Telefónica have committed £1 billion in new net funding to nexfibre to fund the transaction, comprising £850 million from InfraVia and £150 million jointly from Liberty Global and Telefónica. The deal is described as unlocking £3.5 billion of investment into the UK market in total.

Rajiv Datta, chief executive of nexfibre, said the transaction marked a turning point for the industry. “Creating a wholesale challenger with the footprint and funding needed to compete properly at a national scale,” he said, “is why our planned acquisition of Netomnia is a real turning point for the industry.”

Matthew Howett, founder of Assembly Research, described the deal as a template for what the UK market now needs. “Bringing together scale and capital will be the key ingredients to create a stronger rival to Openreach in line with the policy goal of enduring infrastructure-based competition,” he said.

A significant section of the report addresses the regulatory pathway. The deal is expected to trigger a Phase 1 CMA merger review given Netomnia’s revenue level, and Assembly argues that competition concerns would be limited.

Full fibre overlap between the nexfibre and Virgin Media O2 networks and Netomnia’s deployment stands at 17% of premises, around 540,000, with overlap in many northern regions understood to be below 10%.

The report contends that the appropriate geographic frame of reference is national, not local, and that the presence of Openreach across the combined footprint limits the merged entity’s ability to harm competition on price or service.

Assembly warns that a protracted Phase 2 investigation could delay the deal significantly, with potential completion pushed into 2027, creating regulatory uncertainty for altnet investors across the market and chilling further consolidation at a time when the sector can least afford it. The report concludes that a Phase 1 clearance, even if conditional, would best serve the interests of investment, competition and consumers.

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