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The UK is on the road to having a truly competitive broadband market within six years as other providers dilute the influence of its largest player, the country’s telecoms regulator has indicated.
Ofcom said that restrictions placed on BT’s Openreach — which hosts 71 per cent of customers according to New Street Research — could be reduced after 2031 because of the expansion of rival networks, including VM0-2 and CityFibre.
The broadband market was on a “path to deregulation”, Ofcom networks director Natalie Black said, adding the regulator could remove restrictions if there was enough “sustainable competition” between providers.
Deregulation “is where we want to be, but we would need to make decisions at the time and [consider] what that would mean in practice,” she told the Financial Times.
Ofcom’s draft proposals maintain several restrictions on Openreach — which the regulator deems still has “significant market power” — in an effort to drive competition.
These include giving other providers access to their ducts and poles, certain price controls and restricting it from offering competition-stifling deals, with the regulator deeming other providers not established enough to enable deregulation.
Black said the regulator wanted to “regulate for growth” and “give investors the certainty needed to put their hands in their pockets and invest long-term in the UK”, with Ofcom hoping the plans will drive the UK to full fibre coverage.
About seven in 10 UK homes have access to full fibre broadband — which is when fibre-optic cables connect to the premises — up from one in 10 in 2020. Ofcom believes the service can reach 97 per cent of homes by 2027.
Yet despite the expansion, the UK still lags behind countries such as France and Spain in percentage of homes that have access to full fibre broadband, something Black aimed to address.
“We still have a job to do, that’s exactly why we are keeping our foot on the pedal,” she said.
The proposals are for the Telecoms Access Review 2026, the regulatory framework that will govern the broadband industry over five years until 2031.
While provider competition has driven growth, concerns have been raised over the viability of many altnets, with the sector posting cumulative losses of £1.3bn in 2023, according to consultancy Enders.
Black said that while it was not Ofcom’s job to pick “winners and losers”, she would “consider all options” if a provider went bust to protect consumers, and was watching the situation closely alongside the Department of Science and Technology.
Greg Mesch, chief executive of altnet CityFibre, welcomed the recognition “that there was more to do”, while welcoming the “clear support” for further investment and competition.
Mark Shurmer, managing director for regulation at Openreach, praised the continuity with the 2021 review, but added it was “vital” the regulator continued on the same path.
But Matt Howett, founder of Assembly Research, said: “We need to wait and see if what’s proposed is enough to satisfy the government on its mission for growth.”
He said that any proposals needed to be compared to the list of strategic priorities for the regulator, which are set by the government and have not yet been published.
Ofcom will allow consultation on its proposals until June, before publishing a final document in March 2026 to be enacted in April.
