CK Hutchison’s merger of Three Italia with Wind Telecomunicazioni was approved only after the companies agreed to divest assets. More recently, regulators told Orange and MasMovil they had to grant spectrum and roaming access to rival Digi as part of their Spanish merger.

Howett says these remedies have “only compounded the problem” by allowing new entrants into the market just as the existing players are trying to consolidate.

“Where four to three has been allowed to happen, the remedies that you put in place have often just recreated the problem you’re trying to solve,” he says.

Matthew Howett appeared on BBC News’s World Business Report to discuss Apple's intended compliance with the European Commission's DMA in respect of app stores

Matthew Howett, founder and chief executive of Assembly Research, argues that one of the key purposes of alt-nets has been to push Openreach to build its own network more quickly.

“That dynamic has played out already, it’s happened… so I think once they’ve lit that firework the vast majority of Project Gigabit will happen,” he says.

Matthew Howett, founder and chief executive of telecoms research group Assembly said this “could well be the first domino to fall in terms of an altnet being bought by one of the big players.”

“The UK broadband market is set to enter an era of scaled connectivity challengers, after first a period of dominance from the incumbent followed by a proliferation of altnets,” he added.

While the circumstances behind the sale of Upp are relatively unique, observers believe that many of the more than 100 so-called “alt nets” – mostly small broadband providers rolling out services across the country – will be snapped up by the biggest telecoms players as market conditions get tougher.

“Alt nets are a key piece of the connectivity jigsaw, but consolidation has been inevitable as new sources of funding dry up, focus on take-up intensifies and investors increasingly demand returns,” said Matthew Howett, the founder and chief executive at Assembly Research.

“Today’s announcement could well be the first domino to fall in terms of an alt net being bought by one of the big players.”

The deal is one of the first big signs of consolidation among “altnet” broadband providers by the large infrastructure groups that many analysts have been predicting. 

Matthew Howett, analyst at telecoms research group Assembly, said: “Altnets are a key piece of the connectivity jigsaw, but consolidation has been inevitable as new sources of funding dry up, focus on take-up intensifies and investors increasingly demand returns.”

According to a study by Assembly Research, a research company, commissioned by Virgin Media O2, average monthly household spending on telecoms services has fallen by almost one-fifth since 2017.

The report also found that the telecoms industry was investing up to £2.5bn a year in mobile networks, and about £3.8bn into fixed broadband. It estimated that combined capital expenditure accounted for nearly 70 per cent of total investment made by some of the largest industry players.

Mobile industry executives highlight the decision of Boris Johnson’s government in 2020 to strip Huawei out of Britain’s nascent 5G networks because of national security concerns as a reason for the slow rollout.

“That absolutely put the brakes on deployment for the operators,” Matthew Howett, chief executive of Assembly Research, said.