TalkTalk has chosen to partially divert its business contracts away from incumbent wholesale internet provider BT Group PLC (LSE:BT.A) towards major altnet competitor CityFibre.
The move, which comes eight months after Talktalk Telecom Group PLC (LSE:TALK) opened up its £600mln business to rivals of its longstanding business partner, could divert up to £100mln in revenues away from BT.
Over one-third of TalkTalk’s new business-to-business ethernet connections may transition to alternative networks such as CityFibre in the upcoming years, said TalkTalk’s chief executive Tristia Harrison.
TalkTalk’s decision marks another blow to BT, which saw an 8% share slump after unveiling a fall in pre-tax profits and a 55,000-head workforce reduction in today’s earnings call.
BT’s stranglehold on the full-fibre broadband sector is increasingly being challenged by alternative network (altnet) providers including CityFibre in recent years.
According to data provided by broadband market intelligence company Point Topic, planned private investment into the altnet sector for the rest of the decade will surpass that of BT Group and second-largest wholesale provider Virgin Media O2 (VMO2) combined, reaching £24bn by 2030.
By the end of 2022, altnets had covered 25% of the UK with full-fibre networks, including 25% of hard-to-reach rural areas.
The number of connections to independent fixed networks grew by 48% year-on-year, reaching over 1.5mln.
Approximately 25% of the UK population can now access full-fibre broadband from independent providers, and over 2mln properties in rural areas have been reached by Altnet fibre networks.
Combined investment into full-fibre infrastructure is eclipsed only by HS2 as the largest infrastructure investment programme in the UK.
Source: Point Topic