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Research Round-up July 2026

  • Writer: Veronica Regnault
    Veronica Regnault
  • 1 day ago
  • 8 min read

  

Key publication of the month:



When the Competition and Markets Authority pushed Nexfibre's proposed takeover of Netomnia into a Phase 2 investigation, it wasn't a bureaucratic reflex. Phase 2 referrals are relatively rare in the UK Altnet sector as most fibre consolidation to date has cleared in a matter of weeks at Phase 1.  This one didn't, and the reason sits in a single piece of competition-law math: the Herfindahl-Hirschman Index, or HHI.


What HHI Actually Measures

HHI is the standard tool competition regulators - the CMA, the US FTC and DOJ, the EU Commission - use to quantify how concentrated a market is. A market with one dominant firm produces a huge number (a pure monopoly scores 10,000); a market split evenly between many small players produces a low one.


The CMA applies rough thresholds to interpret the result:


  • Below 1,500 - unconcentrated, minimal merger concern

  • 1,500–2,500 - moderately concentrated, scrutiny warranted

  • Above 2,500 - highly concentrated, mergers presumed problematic

  • Above 3,000, with an increase of 200+ points - treated as a serious competition concern

  • Above 5,000 - extreme concentration, very hard to clear without major remedies

 




The Number That Triggered Phase 2

Restricting the analysis to the largest nationwide Altnets (CityFibre, Hyperoptic, and Gigaclear) in competition with nexfibre and Netomnia, the picture is stark.


Before the merger, five players split the market reasonably: CityFibre led with roughly a 35% share, followed by Netomnia (~27%) and nexfibre (~22%) as independent operators, with Hyperoptic and Gigaclear rounding out a competitive fringe. That produces an HHI of 2,580 - already into "highly concentrated" territory, but not unusual for an infrastructure sector this early in its build-out.


After the merger, the market drops from five real competitors to four, and most critically, the second and third players combine into a new one. CityFibre remains at roughly 36%, but the merged Nexfibre-Netomnia entity now holds 47.5% of the Altnet wholesale market outright. The resulting HHI: 3,702, a jump of over 1,100 points (Figure 1).


That single 1,100-point increase is more than five times the CMA's 200-point screening threshold for merger concern, and the post-merger figure itself sits well past the 3,000 mark the CMA treats as a serious red flag. Put plainly: this deal doesn't just nudge an already-concentrated market, it converts a five-player field into a straightforward duopoly, with the top two players controlling 83.5% of Altnet wholesale FTTP between them.


See the full article for all the key figures, including the scenario where Openreach is added as a sensitivity case for the CMA.


Key July telecoms sector news

1 July – Openreach confirmed it has now activated "Stop Sell" rules across a growing share of its full fibre footprint, with legacy copper products being withdrawn exchange-by-exchange ahead of the January 2027 PSTN switch-off. Legacy Wholesale Line Rental pricing continues its staged 2026 increase, with the second step (a further 40% rise) taking effect from 1 July, en route to roughly doubling 2025-level pricing by October.


13 July – First-ever mobile connectivity delivered to residents in rural North Wales village.


15 July – Openreach launched a new trial aimed at better monitoring incidents on FTTP lines in real time, using automated detection to proactively notify affected communications providers and end customers by SMS, rather than relying on manual fault reporting.


21 July – BT announced it has been selected by Scottish Water to deliver a new fully integrated network and security service transformation, supporting the digital foundations behind water services used every day by millions of people across Scotland.


23 July – BT Group published its results for the three months to 30 June 2026:

  • FTTP footprint increased to 23.4m, an increase of 514k in the quarter, on track to achieve our 25m FTTP build target by December 2026

  • Record customer demand for Openreach FTTP with 574k net adds in the quarter; total premises connected 9.4m, bringing our market-leading take-up rate to 40%; Openreach broadband ARPU grew by 7% to £17.7, driven by higher FTTP take-up, speed mix and price increases

  • Openreach broadband lines fell by 192k; we continue to expect losses of c. 800k in the year

  • Record retail FTTP base growth, up 1.1m year-on-year to 4.8m, comprising 4.5m Consumer connections (54% of the broadband base) and 0.3m Business connections

  • Continued Consumer customer growth, up 1k in broadband, 13k in postpaid mobile and 9k in TV. Both our broadband and postpaid mobile churn remained stable year-on-year at 1.1% and 1.0% respectively despite competition as our fibre-first strategy continues to deliver


23 July – Openreach published its notification of Tranche 21 covering 139 FTTP priority exchanges, with a "Stop Sell" implementation coming into effect from 19 August 2026, and notified CPs of the realignment of 14 notified exchanges.


23 July – Openreach notified a further 112 exchange areas (Tranche 25) for "Stop Sell," taking the total to 1,572 exchanges covering approximately 15.4 million premises, or around 57% of its full fibre footprint, by 20 August.


28 July – Ofcom proposed blocking an Openreach wholesale discount offer for the first time in the regulator's history. The "Incremental New to Openreach" offer, notified in June, would have given ISPs a discount of up to £9.50 per customer for up to 30 months for new full-fibre sign-ups above their normal run rate. Ofcom's provisional view is that the offer is "not fair and reasonable" and could harm the development of network competition, undermining rivals such as CityFibre and Hyperoptic who rely on the same pool of switching customers to grow. Openreach has disputed the finding, saying the offer was made in good faith. Ofcom will consult until 27 August, with a final decision due by the end of September. Read our in-depth analysis piece here.


1 July – VMO2 combined its Commercial and Data & Operations functions into a single Consumer unit, led by newly appointed Consumer CEO Lyssa McGowan OBE (former CEO of Pets at Home, and previously Chief Consumer Officer at Sky), reporting to CEO Lutz Schüler.


8 July – Ofcom fined Virgin Media £28 million (its largest ever consumer-harm fine) after finding the operator had systemically obstructed customers trying to cancel contracts between January 2022 and September 2024. The investigation uncovered deliberate call-dropping, excessive call transfers, unnecessary holds, and a commission scheme that rewarded staff for talking customers out of leaving. Virgin Media said it has since redesigned its customer service processes.


24 July – VMO2 published its Q2 2026 results. Its broadband customer base continues to decline (reporting 28,000 losses) even as its FTTP footprint passes 9 million premises, underlining the pressure to convert network build into net adds as full fibre competition intensifies.


28–29 July – Reports (later confirmed by Ofcom-adjacent reporting) indicated VMO2 has begun trialling higher DOCSIS channel allocations on its coax (HFC) network, a precursor to a possible 2Gbps speed tier for customers not yet migrated to FTTP.


30 July – The Financial Times reported that VMO2's shareholders, Telefónica and Liberty Global, are weighing options to reduce the operator's £22 billion debt pile, including cutting the expected £200 million shareholder dividend, reducing capital expenditure and possible job cuts. The discussions follow a sharp sell-off in VMO2's unsecured bonds during July, with investors reportedly also factoring in the future infrastructure costs of the pending Netomnia acquisition.

Throughout July – The CMA's Phase 2 investigation into nexfibre's proposed £2 billion acquisition of Netomnia progressed, with the regulator's "Areas of focus" document published on 7 July setting out its initial competition theories (without pre-judging findings); responses were due by 20 July. CityFibre CEO Simon Holden has continued to argue the deal "would remove a successful challenger and reduce choice for consumers," citing an 80% network overlap between nexfibre and Netomnia. The CMA's statutory deadline for a decision remains 15 December 2026.


1 July – CityFibre has agreed the sale of Entanet to telecoms entrepreneur Tom O’Hagan, founder and former CEO of Virtual1. The transaction, which is subject to final approvals, enables CityFibre to focus exclusively on scaling services delivered over its own full fibre infrastructure, while positioning Entanet for growth under new ownership.


The sale includes partners served outside CityFibre’s network footprint, along with associated managed services, network assets, systems and support functions.


15 July – CityFibre placed around 200 roles at risk in a further restructuring, subject to consultation, as it looks to "optimise its cost base" against a difficult funding and consolidation backdrop. The move follows an earlier 2026 restructuring of around 450 roles. CityFibre said customer numbers grew 20% in H1 2026 and that it remains focused on profitable growth, having passed the 1 million connections milestone (out of ~4.7 million premises passed) in June.


30 July – Reports emerged that CityFibre is set to raise £900 million (c.$1.2 billion) in fresh equity from existing shareholders, including Goldman Sachs, Antin Infrastructure Partners, Mubadala Investment Company and Interogo Holding, as the UK's largest Altnet looks to fund further consolidation and continue its challenge to Openreach.

2 July – ISPReview reported that the latest annual ORESA Growth Index 2026 included five alternative full fibre broadband networks: Toob, Netomnia, Grain Connect, Community Fibre and Fibrus. The full list ranks the UK’s 100 fastest-growing private companies by compound annual growth rate (CAGR) – those with at least £5m in recent sales.


8 July – Rural FWA and FTTP provider Airband are reported to be formally seeking buyers. According to Total Telecom, Airband’s full fibre network currently covers around 175,000 premises and a further 265,000 are covered by FWA. Of this total footprint of around 440,000 premises, only around 30,000 premises are customers which is far below the level the company would need to recoup the costs of its expensive network deployment in the short term.


13 July – Wessex Internet reported that over 4,000 homes and businesses in South Somerset can now access full fibre broadband thanks to a successful partnership between rural broadband specialist Wessex Internet and Connecting Devon and Somerset (CDS). Wessex Internet has delivered a critical full fibre broadband connection to 4,190 hard-to-reach rural homes and businesses through its contract with CDS. With the network build commencing in May 2021 and an additional 1,100 properties being added to the contract in June 2022, Wessex Internet successfully completed the roll-out by January 2026.


17 July – Grain announced that profitability has continued to improve with the independent network provider delivering 10% EBITDA margin across the year ended March 2026.  Homes ready for service grew by 19% during the financial year to cover over 300,000 premises across the UK, with the rate of expansion expected to accelerate even further in the coming year. 


Customer numbers also increased by 31% to 56,000, with penetration growing to 19%, up from 17% last year. Excluding new sites which went live during the year, penetration on the existing footprint grew from 17% to 21%.  


21 July – Netomnia CEO Jeremy Chelot defended the proposed nexfibre merger as the investigation entered its substantive phase, describing the deal as "not so much a choice" as a necessity given the increasingly challenging economics of the standalone Altnet model.


24 July – Hyperoptic published its annual results for the year ended 2025. Highlights included that revenue increased by 22% to £139 million, driven by subscriber and ARPU growth; customer base grew by 18% to over 440,000 subscribers, with average penetration of homes passed at 31%, and mature cohorts above 60% (and newbuild cohorts above 70%); its network has now passed two million homes and businesses, however our data shows that Hyperoptic's network has around 1.4 million premises Ready for Service as of early Q2 2026.


10 July – Bidding intensified for TalkTalk's wholesale arm, PlatformX Communications (PXC), which reaches around 98% of UK premises and serves ~2.75 million customers. Africa-focused Telecel Group tabled an offer reported at up to £450 million, competing against a bid from private equity firm Epiris (teamed with PXC chairman Tom O'Hagan) and interest from Octopus Investments. TalkTalk continues to carry over £2.6 billion of debt and is running the process via PJT Partners.


10 July – BDUK's July update on Project Gigabit contract progress showed 287,510 of 838,490 contracted premises built (34%), up from 271,460 (32%) the previous month — a gain of around 16,050 premises. The contracted total itself fell slightly due to scope trims in Derbyshire and Lincolnshire/East Riding, partly offset by an increase in Worcestershire.


23 July – A High Court Writ of Control was issued against Starlink Internet Services UK Limited, authorising enforcement officers to seize UK ground-station assets (including sites at Goonhilly and Chalfont) over an unresolved consumer judgment debt. Starlink is expected to settle before physical enforcement occurs; the action followed a dispute that had earlier stalled in arbitration with CEDR.


Throughout July – Ofcom continued work under its 2026/27 growth goals, including ongoing consultations on satellite spectrum (Q/V band access, the 2GHz MSS band) and preparatory work for the Hull Telecoms Access Review, due in October.


Please get in touch if you would like to find out more about UK datasets, the Broadband Graph or particular publications.



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