Nexfibre – A rather interesting alt-net

Nexfibre is a rather interesting alt-net as it is backed by the same investors that own Virgin Media O2, the American telecoms giant Liberty Global and Telefonica alongside Infravia Capital Partners, an infrastructure investor who also holds a stake in Cignal, an infrastructure company based in Ireland.

In an interview with Richard Tang of Zen Internet, Nexfibre CEO Rajiv Datta explains “Nexfibre exists in order to create a national platform that willi compete on a wholesale basis with Openreach. To have a genuine alternative infrastructure platform that incorporates the 5 million homes that we’re going to build on a greenfield basis, but also to leverage the 17 million homes that Virgin Media O2 will bring and are in the process of upgrading to create a genuine competitor in the marketplace”.

Virgin Media’s DOCSIS cable network has been a massive asset for the business for nearly twenty years as it has been able to beat the raw speeds offered by Openreach on ADSL and FTTC/VDSL services (although sometimes has been let down by other parts of the network at a retail level) year after year as new technology arrives. It has not, until now, allowed its cable network to be used by other providers on a wholesale basis and establish itself as an infrastructure provider. This is what Nexfibre appears to be capitalising on, combining the existing Virgin Media footprint (which is still being upgraded in places) and adding to that further build as Nexfibre combines these into a wholesale network, which will in total span 22 million homes.

With VMO2 as its ‘anchor tenant’ it gives Nexfibre a significant boost in investment and in turn allows VMO2 to target multiple services to customers in its build areas.

Nexfibre is obviously early in its rollout and minuscule on a map with both Virgin Media and Nexfibre network shown, however, it is targeting those areas where the cable companies that became NTL or Telewest and then Virgin Media, may have skipped. (Our map may show Nexfibre postcodes also on the Virgin Media layer).

Nexfibre, which aims to target urban and semi-urban areas, expects to hit 5 million premises passed by 2026. They passed 500,000 homes passed at the end of September. (The term ‘homes passed’ isn’t always the same as ‘ready for service’ in the alt-net world).

Rajiv explains that Nexfibre will build more than any other alt-net in 2024 and any opportunities to accelerate the plan or extend the market by acquiring another alt-net, would be considered if this made financial sense.

You can view the full interview on YouTube.

He also notes that the market focus has moved from ‘homes passed’ to ‘homes connected’ but believes that the discussion will change further towards ARPU (Average Revenue Per User), no doubt as customers with higher spending (likely from bundling) are less likely to switch services than those with merely say a broadband service, an isolated commodity.