Building Gigabit Britain — what’s next for the wholesale market?

By James Audley, Head of Wholesale Product, Marketing and Strategy at Virgin Media O2 Business

May 2022

The UK is currently undergoing a period of unprecedented full fibre connectivity growth, fuelled by investment, innovation and competition. Across the nation, full fibre is being lit up in cities, towns and villages at a scale and pace that we’ve never seen before – driven by network operators both big and small.

However, now is not the time to take our collective feet off the accelerator. From hybrid working and entertainment, right the way through to the way we access basic goods and services and home learning, the UK’s need for reliable, ultrafast and accessible connectivity – for all – has never been greater. But yet, there is still a long way to go to reach the Government’s ambitious targets of 85% of premises having access to gigabit services by 2025, particularly at a time when tax incentives to building FTTP networks are ending.

So, as we reach a pivotal point in the rollout of UK connectivity, what’s next? And specifically, how will wholesale partnerships help keep up the pace we need for growth?

Investing in Gigabit Britain

When the Government pledged to invest £5bn in the UK digital broadband via their Project Gigabit plan last year, the move was well-received by the industry. It was rightly seen as an opportunity to connect millions of people and businesses across the UK – particularly in hard-to-reach areas.

The progress over the last year has been remarkable. Ofcom says it represents the largest year-on-year increase in gigabit-capable coverage the UK has ever seen, with the national rollout clearly demonstrated in its Connected Nations report. I’m proud to say that Virgin Media O2 has been the driving force behind that.

Last December, we finished upgrading our entire national network to gigabit speeds, connecting all 15.6M homes on our network to these future-proof speeds and becoming the largest gigabit provider in the UK by far.

Now, we’re committed to upgrading our fixed network to FTTP. And our shareholders are in discussions to build out to a further 7 million premises with fibre with the backing of a financial partner. These major investments will further expand our reach and ensure more customers can benefit from next-generation services.

Of course, this is good news for customers and will play a major role in helping the Government reach their goals, but it’s also good news for smaller network operators looking for additional backhaul or wholesale infrastructure.

Our vision is to reimagine connectivity and upgrade the UK. We want to see the nation fulfil its connectivity potential, with all the vital benefits this will bring to consumers, businesses and communities alike. But we’re not the only organisation laying fibre.

There are hundreds of AltNets with plans to build to premises in particular geographical areas. Many are building in rural areas, helping bring ultrafast connectivity to local communities that have previously been underserved.

Overcoming the challenges ahead

We know that to realise the UK’s connectivity ambitions, both traditional network builders and AltNets have a role to play. Virgin Media O2’s wholesale division is focused on leveraging our national fixed network infrastructure to help other network partners. After all, our scaled network can offer partners the ability to rapidly expand and reach new local areas without the delays and costs of building dedicated core network connections. This frees up AltNets to lay FTTP connections, underpinned by robust and resilient networks to carry customers’ data.

We also need to recognise that there are some parts of the country where there is little – or no – commercial incentive for network partners to deploy full fibre services. To achieve truly national coverage, the industry needs Government support to attract the necessary investment to these areas.

For example, ending this month, the Government’s five-year fibre tax holiday has helped spur on essential investment in UK infrastructure – giving the industry an estimated £60m boost. As this business rate relief comes to an end, and at a time of significant economic uncertainty, the Government has an opportunity to continue supporting privately funded network expansion and upgrade programmes. The industry needs long-term stability in public policy and regulation that focuses on enabling and unlocking investment. After all, this will not only drive new regional competition, it will ultimately help connect more people.

In the meantime, continuing to get more fibre in the ground will be more important than ever to ensure no one in the UK gets left behind. With experienced and large-scale network operators like Virgin Media O2 ready to provide the backhaul services AltNets need, we stand ready to help build on the momentum of the last few years and supercharge the UK’s connectivity ambitions.


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