What is the future of fibre?

Recently, we attended the FTTH Council Europe’s ‘Future-Proof Returns: Why Fibre Remains an Essential Asset Class’ workshop for investors. A number of key insights were provided during the event, but the message was clear: the future for fibre remains bright.

A change of focus

One interesting takeaway was the apparent ‘rebranding’ of the fibre market. Rather than talking simply about fibre or the concept of ‘Fibre-to-the-Home (FTTH)’, the focus now appears to be on “world class digital infrastructure” and a “digital backbone”, extending the scope to include data centres, long-haul connectivity, and even the use of non-fibre and hybrid technologies to support rural areas. As Swedish fibre network experts Digpro also noted in market research, the panel also advised that the emphasis on “homes passed” is now increasingly shifting towards “homes activated” instead.

Fibre’s role in delivering seamless connectivity is well-founded, and these comments do not undermine the progress being made in that area. In fact, it was emphasised that the internet will always need fibre, and that many service economies – such as the United Kingdom – will and already do run on the internet. According to the FTTH Council Europe’s own Market Panorama, the UK is currently seeing lower-take up rates than the rest of Europe, so there does remain a commercial challenge that is still to be addressed in this area.

A market on the rise

The changing nature of the market was also in scope during the event. According to analysis carried out by Enders Analysis, the UK Altnet market providers collectively lost around £1.5 billion in 2024, with a number of investment plans not achieved during this period. Pre-COVID 19, business plans often assumed high take-up and relatively stable interest rates. When these rose, financing costs ballooned, while subscriber uptake often fell below the expected penetration levels.

Yet the situation is changing. As Alix Partners noted in their 2025 European Fibre Survey, growth-focused business models built on high penetration rates haven’t materialised, but expectations have changed: before 2024, the majority of Altnets were targeting 40-60% penetration. In 2025, these expectations have matured, and companies were typically targeting between 30-50% penetration. Investors’ expectations have also been tempered as a result, and may now see companies within this bracket as a good acquisition targets. Simply put, the more customers you have, the bigger the network, and the more promising an asset you become.

To this end, keeping costs down and finding efficiencies is crucial. Other players in this field, such as French fibre and component suppliers Acome, would also say that preventing and reducing churn is another key metric to prove viability here too. This is even more important considering the growing threat of Starlink and satellite connectivity to the fibre sector – at the moment their plans are expensive, but comments from Elon Musk suggest they’re coming for a greater market share in the coming years.

The case for fibre

Despite broad coverage, rising data demands and major funding gaps are sustaining the potential of the fibre market. Countries which do not have world class digital infrastructure may not be able to survive or even thrive without it, and run the risk of falling behind. At the same time, and especially in Europe, politicians and regulators understand that investors need to see a reasonable rate of return, and will therefore look to create a regulatory environment in which it can flourish.

Indications from the current market suggest that this rate is already rising, and that the days where investors weren’t seeing returns due to the subscriptions failing to meet the expected levels are now over. In May 2025, the Altnet CommunityFibre posted a maiden profit and advised that its customer base grew to 336,000. If more businesses follow suit and demonstrate their viability, it’s likely that investors will continue to see fibre as a valuable asset.

The view from the industry

Don’t just take the FTTH Council Europe’s word for it either: Point Topic’s Q3 2025 UK ISP and Network Supplier Metrics’ also found a slight return to growth in recent months.

Full fibre connections reached an estimated 11.56m – up 7.9% quarter on quarter – while Openreach saw approximately 551,000 full fibre net additions, bringing its FTTP subscriber base to 7.65 million. Altnets also saw their own increase in subscriber take-up with 193,000 net additions in Q3 alone.

It’s fair to say that Europe’s fibre mission remains fruitful for investment, offering long-life assets, steady cashflows, inflation protection, and can be bolstered further through exposure to digitalisation trends. With further investment, operators can drive further rollouts, optimise their deployment models and unlock new revenue streams for those willing to become involved.