A study by Neos Networks has found that as alternative broadband providers (altnets) look for opportunities to survive and expand in the UK’s competitive broadband market, almost all (96%) are considering mergers and acquisitions (M&A) and partnerships with other service providers.
The research, conducted by Censuswide on behalf of the business connectivity provider earlier in 2025, took the opinion of 100 senior decision-makers at UK altnets and highlighted some of the hurdles that many altnets are facing.
Tough economic conditions in the UK were seen as fundamentally affecting growth strategies for altnets, with almost half (48%) of those surveyed having found it difficult to access funding over the past year. High interest rates are exacerbating this challenge, cited by 48% of altnets as the primary reason behind their funding struggles. Regulatory constraints and strict lending criteria were also cited as significant barriers to securing financing.
When asked about acquiring customers, 55% of respondents said their target customers are “locked into pre-existing contracts”, which Neos said was a clear indicator of the growing competitive pressure from legacy providers. This was followed by a lack of awareness (47%), with many altnets facing competition with up to four other providers in regions where they have networks.
Altnets were also found to be facing other regulatory challenges, including the knock-on impact of BT’s closure of its copper network as it transitions to full fibre. As part of this modernisation, most altnets are now under pressure to remove equipment from BT’s exchanges, which are due to start closing in January 2027. The Neos research shows it will cost them, on average, £1.4m.
When asked what technologies they were using to differentiate themselves from their competitors, the majority of respondents said they were deploying software-defined networking and network function virtualisation (53%), with 5G fixed wireless access (39%) and artificial intelligence/machine learning-enabled BSS/BSS automation also ranking highly.
Going forward, the survey found almost all respondents (98%) expect to move beyond just offering traditional residential broadband to broaden their services and appeal. This was also cited as the number one long-term ambition for altnets. To that end, 46% said they plan to launch smart home technology, while 43% noted that they will look to offer enterprise connectivity. In addition, 42% were looking to launch security solutions and packages, with 35% saying they would start offering multi-service solutions such as TV and entertainment.
Just over half of those surveyed (55%) highlighted customer satisfaction as their primary goal for the next few years, beating out other, more revenue-critical operations, such as increasing customer subscriptions and driving operational efficiencies.
Assessing the findings highlighted in the research, Neos Networks CEO Lee Myall said the altnet industry now stands at a crucial crossroads, with heightened competition, financial pressures and shifting regulatory frameworks meaning that altnets must evolve rapidly to secure their long-term future.
“Altnets have played a pivotal role in reshaping the UK’s connectivity landscape, driving the expansion of full-fibre networks and challenging established incumbents,” he said. “Altnets are exploring a variety of strategies – from mergers and acquisitions to strategic partnerships and service diversification – to strengthen their market position and pave the way for sustainable growth.”
The Neos study follows research released last month by the Independent Networks Cooperative Association that revealed how momentum has grown among its network of altnets in the UK to drive gigabit connectivity to rural and hard-to-reach locations in the UK.