Warburg Pincus and KKR are preparing to sell their UK fibre broadband businesses, putting two relatively healthy assets on the market as the alternative network sector faces mounting pressure. New Street Research values the combined enterprise at approximately $2.7bn (£2bn), while KKR explores buyers for Hyperoptic, which serves over 400,000 customers.

The altnet model assumed households would rapidly adopt full-fibre connections, but uptake has disappointed. Network construction costs have risen sharply while lenders have pulled back, leaving a sector that once raised capital freely now scrambling for financing. Even profitable operators struggle to find buyers when potential acquirers face their own financial constraints.

CityFibre illustrates the sector's challenges, carrying net debt of around $4.9bn (£3.7bn) owed to NatWest and Lloyds. Some creditors have approached hedge funds about purchasing this debt at discount ahead of potential restructuring. Meanwhile, Telefónica and Liberty Global focus on completing their own $2.7bn (£2bn) acquisition of Netomnia.

German fibre operators face similar headwinds. 3i Infrastructure wrote down its DNS:Net stake to zero in May, citing deteriorating lending appetite. Distressed-debt firm FitzWalter Capital, holding half of DNS:Net's debt, now pursues control from 3i following its playbook of acquiring indebted networks cheaply and maximizing existing infrastructure.