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Community Fibre has posted its maiden profit even as stiff competition and higher interest rates take a heavy toll on the nascent UK “altnet” industry.
Community Fibre, an alternative fibre network backed by private equity firm Warburg Pincus, reported earnings before interest, tax, depreciation and amortisation of £8mn in 2024.
Graeme Oxby, the company’s chief executive, said the results proved “broadband competition could be financially sustainable in the long run”.
However, Community Fibre still reported a pre-tax loss of £118.5mn last year off the back of substantial investments in its network.
The cost of those investments, combined with growing competition among altnets, led to cumulative losses across the sector hitting £1.3bn in 2023, according to consultancy Enders Analysis.
Community Fibre paused its network expansion last year to conserve cash and build connections within its existing network. The company, which serves 1.3mn homes in London, is one of several altnets looking to challenge the dominance of BT’s Openreach and Virgin Media 02.
Openreach is the largest broadband provider in the UK, serving more than 18mn homes with full-fibre connectivity. In 2021, Ofcom imposed constraints on its network pricing to stimulate more competition in the market.
Since then, altnets have proliferated and now collectively serve 16.4mn homes, up from 8.2mn in 2022, according to a recent report by the Independent Networks Cooperative Association.
Community Fibre, chaired by Olaf Swantee, former chief of BT-owned mobile network EE, reported an 82 per cent increase in annual revenue to £76mn in 2024. Its customer base grew by 50 per cent to 336,000, making it the UK’s third-largest altnet.
James Ratzer, analyst at New Street Research, said Community Fibre’s results showed it was “arguably the UK’s most successful fibre challenger”.
“Consolidation in the UK fibre market is inevitable and when it comes, they are one of the strongest-placed to take a leading role,” he added.
Community Fibre has previously considered buying competitors, including G.Network, the Financial Times reported.
Altnets have been cutting jobs and merging as intensifying competition and rising interest rates take a heavy toll on the sector. The UK’s largest altnet, CityFibre, agreed a deal to buy competitor Connexin in March.
CityFibre is seeking £1.5bn of extra funding to fund the next phase of its fibre rollout. Two people familiar with the discussions said the deal would probably be signed within the next few months.
