The UK’s “altnet” broadband sector is struggling with a net debt of more than £9bn, according to data from Enders Analysis, following rapid growth after the pandemic.

Karen Egan, head of telecoms at Enders Analysis, said the G.Network case had shown “that lenders can act quite decisively and are relatively quick to accept harsh writedowns once hope is lost.” 

 “While it’s painful for equity investors in particular right now in the altnet space, once the challenging economics of most of these ventures becomes irrefutable, the faster an alternative course is taken the better it is for all concerned,” she added.

“It’s one of those really interesting areas that flew under the radar for slightly too long because it hadn’t been considered an explicit thing,” Claire Holubowsky, a senior analyst at media strategist Enders Analysis, tells City AM “But all the conditions for its success have been there for 20 years.”

“Advertising is a much higher margin business,” says Holubowsky. “A lot of the significance to supermarkets isn’t quite visible yet. But then that’s beginning to change as everyone realises that retail media is big. And it’s not going away.”

“It’s clever of Amazon to include free television. This kind of partnership costs the distributor relatively little, but it allows them to keep users longer in order to then sell them other products,” explains François Godard, an analyst at Enders.

Karen Egan, at Enders Analysis, said: “There are certainly a lot of alt-nets out there that are really struggling financially and hoping that they will be bought. G Network is a reminder that there won’t be a buyer for all of them.”

But no good deed goes unpunished and competition for territory among Openreach, Virgin Media 02 and the altnets has been intense and costly. “I cannot tell you how crazy a market it is out there,” says Karen Egan, head of telecoms at Enders Analysis. The altnets suffered £1.5bn net losses in 2024, while Openreach lost a net 828,000 customers in that year.

The UK has a related challenge. The saying goes that “if you build it, they will come” but not enough have. Only 38 per cent of homes and businesses that could now connect to full fibre through Openreach have done so, while the altnets achieved only 15 per cent take-up by the end of 2024, according to Enders.

Karen Egan, head of telecoms at Enders Analysis, said FitzWalter’s acquisition of G.Network was “difficult to comprehend as a strategic sale given the buyer’s reputation as a distressed debt specialist” and “the likely difficulty they would have in selling the company on to someone else”. 

“FitzWalter Capital are likely to be able to at least keep the lights on during an insolvency process so that customers are not put at risk of losing service,” she added.

Claire Holubowskyj, at research service Enders Analysis, said the fact that clients were looking to other firms meant WPP needed to 'show some results' in 2026 if it wanted to reverse the decline.

'They are getting better at communicating that things are changing, but the proof will be in the pudding when we see how the revenues are performing in six or 12 months time.'

She added that a break-up of the business was still a possibility if Rose's turnaround failed to achieve results.

'We can't rule out a break-up. It may not be a full fragmentation but they haven't recovered enough to remove that as a prospect,' Holubowskyj said.

The deal has been labelled as the first move in a long-expected financial crunch in the UK “altnet” fibre sector, which had more than £9bn of net debt at the end of 2025, according to Enders. 

Karen Egan, head of telecoms at Enders Analysis, said that despite “very challenging economics, the altnet sector is being kept alive by ongoing trickle funding from very patient investors”. 

She added: “This deal is a reminder that even patient investors don’t remain patient indefinitely, and that there is likely to be quite a bitter financial pill to be swallowed when the music stops.”

The service will see Revolut pay US mobile startup Gigs to use Vodafone’s network, joining other so-called mobile virtual network operators that make up nearly a fifth of the UK mobile market, according to Enders Analysis.