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Enders Analysis have warned quite starkly about the unsustainable losses incurred by alternative network operators challenging incumbent Openreach and others on full fibre rollout. In their report titled “UK Altnets: Something’s got to give” they highlight some of the key challenges faced by altnets in the wider competitive landscape.

“Altnet losses expanded to £1.5bn in 2024, as EBITDA losses persisted and interest costs rose sharply, with ARPUs weakening and operating costs stubbornly high, and the increasing interest burden looking unpayable under any reasonable scenario.

Even the best performing altnets can barely make EBITDA breakeven, and not make sufficient margins to cover ongoing customer acquisition investment, resulting in a perpetual cash drain for their investors.

“All things lead to some sort of innate quality or relevance relative to other production markets,” says Tom Harrington, at Enders Analysis.

“You would assume that the near universality of the English language drives it – and it can’t not be helpful, but it’s more than that.”

“Everyone is already making less content and consolidation will only add to this downward trend in production volumes – nobody merges to spend more,” says Harrington.

Harrington is sceptical about how much money UK producers can make through this strategy.

“The one rule of TV is that no one knows if something will be a success, let alone if they will then buy a T-shirt,” he says.

With still way more than 100 altnets across the full length of the UK, highly respected digital media and telecom sector research firm Enders Analysis laid bare today quite how economically constrained they are, in a new report published for its subscribers and entitled UK altnets: Something's got to give. In its summary, the Enders Analysis team noted that the collective losses reported by the altnets totalled £1.5bn in 2024, “as EBITDA [earnings before interest, taxes, depreciation and amortisation] losses persisted and interest costs rose sharply, with ARPUs [annunal revenue per user] weakening and operating costs stubbornly high, and the increasing interest burden looking unpayable under any reasonable scenario.” 

Aggregate losses at the UK's alternative network operators (altnets) reached £1.5 billion (US$1.9 billion) at the end of last year, up from £1.3 billion ($1.7 billion) in 2023, according to a new report from Enders Analysis. The report claims that even the best-performing of the altnets can "barely make EBITDA [earnings before interest, tax, depreciation and amortization] breakeven, and not make sufficient margins to cover ongoing customer acquisition investment, resulting in a perpetual cash drain for their investors." 

Looking at the UK PSBs alone, a Sky/ITV tie-up would control an estimated 70% of the market, creating significant distance between it and fellow commercial PSB Channel 4. However, when considering the wider video ad market, including Meta, YouTube, Netflix and Amazon, the combined entity would be significantly smaller, with Enders Analysis estimating its market share at 30%.

“In this unchanged and tepid business climate, only rivalry between US streamers facing a mature market could fuel rights inflation,” Enders Analysis wrote in a note earlier this month. “But besides Amazon, none have demonstrated interest or capability to spend significantly in European sports rights.”