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UK broadband provider G.Network has been sold to a distressed debt specialist in a move regarded by analysts as the first sign of mounting financial pressure on the heavily indebted fibre sector.
The sale to FitzWalter Capital was triggered by lenders, two people familiar with the matter told the Financial Times.
G.Network, whose shareholders include USS and Cube Infrastructure Managers, has just 25,000 customers but more than £300mn of net debt including shareholder loans, according to Enders Analysis estimates.
Creditors, including NatWest, Investec and Santander, are expected to suffer writedowns on their investments in G.Network.
The deal has been labelled as the first move in a long-expected financial crunch in the UK “altnet” fibre sector, which had more than £9bn of net debt at the end of 2025, according to Enders.
G.Network was founded in 2016 and its network is available to almost 420,000 homes in London, but it ran into financial difficulties after spending heavily on digging up streets to lay fibre cables.
The group failed to attract as many customers as predicted, leaving a financial shortfall and a cash squeeze. Shareholder USS had previously instructed Jefferies and Nomura to find a buyer in 2024, but failed to attract sufficient interest.
Altnets cover about 40 per cent of the UK population, according to Enders, and have stepped up their hunt for financing and deals. The groups, which are racing to challenge BT’s Openreach and Virgin Media O2, are searching for ways to deal with high borrowing costs and pressure from shareholders for returns.
Lenders, including NatWest and Lloyds, have scaled back their involvement in the sector, which boomed following the pandemic when dozens of companies were set up to challenge the dominant operators.
Analysts are viewing G.Network’s sale as a key moment for the sector, with more debt writedowns and sales expected this year.
James Ratzer, analyst at New Street Research, said: “Given the company’s losses, it is hard to see an obvious standalone business case. We presume the buyer is a short-term holder and would be keen to sell to another provider as soon as possible.”
Karen Egan, head of telecoms at Enders Analysis, said that despite “very challenging economics, the altnet sector is being kept alive by ongoing trickle funding from very patient investors”.
She added: “This deal is a reminder that even patient investors don’t remain patient indefinitely, and that there is likely to be quite a bitter financial pill to be swallowed when the music stops.”
G.Network, USS, FitzWalter Capital, Cube, Investec and NatWest declined to comment. Santander did not immediately respond to a request for comment.
