An altnet’s network cost base is usually the result of hundreds of reasonable decisions made at different points in the build. The problem is that temporary solutions become permanent, contracts renew at different times and the architecture no longer reflects the operator’s current scale or strategy.
The objective
Reduce recurring cost by changing the route, product, supplier, location or requirement—not merely by asking for a discount.
Every saving must remain technically acceptable and survive implementation.
1. Create a reliable cost and contract baseline
Start with what the business is actually paying, not the original business case or supplier order form. Reconcile contracts, invoices, circuit inventory and network topology.
- Supplier, service ID, A and B end, product, bandwidth and route role.
- Monthly and non-recurring charges, indexation and ancillary costs.
- Contract start, minimum term, notice window and renewal mechanism.
- Utilisation, peak traffic and forecast requirement.
- Resilience classification and customer or network dependency.
- Installation, cancellation, excess-construction or early-termination liabilities.
- Known performance, support or delivery issues.
The baseline often exposes simple problems immediately: billed circuits that no longer carry traffic, duplicate cross-connects, legacy bandwidth, unused racks or services whose minimum term has already expired.
2. Measure unit economics without losing context
Useful metrics include cost per site, cost per passed premises, cost per live customer, cost per Gbps and cost per unit of peak traffic. None is sufficient alone. A low £/Gbps figure can still be wasteful if the capacity sits in the wrong location; a high-cost rural link may be essential to protect a large customer base.
3. Challenge backhaul and EAD exposure
Access and backhaul circuits are often the largest addressable category. The original order may have been the only viable option during rollout, but new carrier footprint, dark fibre, PIA, regional networks or route consolidation can alter the economics.
For each expensive route, ask:
- Is another carrier now on-net or near-net at either end?
- Can multiple services be aggregated onto one higher-capacity link without creating unacceptable concentration?
- Would dark fibre or a wavelength provide a lower whole-life cost?
- Is the POP still required, or could the network hand over elsewhere?
- Can the A or B end be moved to a carrier-rich building?
- Does the current protection level still match the network role?
- What are the notice date, migration lead time and termination liability?
4. Revisit transit, peering and interconnection
Transit pricing is only one part of internet-edge economics. Review port size, commit, burst method, peering coverage, traffic direction, DDoS requirements, cross-connects and the operational value of provider diversity.
A smaller commit with 95th-percentile burst may be better than a large fixed commit for an operator with variable traffic, but the answer depends on the supplier’s billing model and the cost of overage. Peering can lower transit demand, but ports, transport and operational complexity still need to be included.
5. Test whether every POP still earns its place
POPs are added for build reach, resilience, handover, latency or historical opportunity. As the network matures, some become lightly used while continuing to attract rack, power, cross-connect, remote-hands and support costs.
- Map the traffic, customers and routes dependent on each site.
- Identify duplicate functions within the same metro area.
- Model failure behaviour if a site is consolidated.
- Include migration circuits, engineering effort and equipment refresh.
- Compare the recurring saving only after one-off costs and new concentration risk.
6. Build a contract opportunity calendar
Commercial leverage is time-sensitive. A technically superior replacement is of little use if the incumbent has automatically renewed for another term. Create a forward calendar showing notice deadlines, minimum-term expiry, price-review dates and the latest date by which a replacement must be ordered.
Lead times vary materially, so the dates need to be based on the actual route and supplier rather than a generic procurement timetable.
7. Create credible alternatives before negotiating
Incumbents negotiate differently when the operator has a deliverable alternative. That alternative may be another carrier, a different handover site, a redesigned route, shared procurement or a small piece of new infrastructure that removes dependence on an expensive tail.
Carrier engagement should use a consistent technical schedule and require suppliers to identify construction assumptions, route dependencies, one-off charges, term, indexation, delivery milestones and upgrade path. This prevents a superficially cheap response winning before its exclusions are understood.
8. Treat implementation as a network change programme
The saving is not realised when a new contract is signed. It is realised when the replacement is operationally accepted and the old invoice stops.
- Define the migration and rollback plan.
- Confirm routing, optics, capacity and monitoring before cutover.
- Coordinate customer or maintenance notifications where required.
- Obtain route, test and handover documentation.
- Give contractual notice correctly and retain evidence.
- Check final bills, credits and termination charges.
- Update the circuit inventory and financial baseline.
9. Verify savings against an agreed method
A robust savings figure distinguishes gross headline reduction from net, recurring benefit. Deduct new recurring charges, amortised implementation cost where appropriate, migration circuits, new equipment support and any unavoidable termination liability.
The baseline date, treatment of inflation, capacity changes and one-off credits should be agreed before the work begins, particularly where a success fee is used.
10. Reject false economies
Some savings are real but strategically wrong. Removing a diverse route, concentrating too much traffic in one POP, reducing repair cover or locking into an inflexible long term can create a larger future cost.
Each opportunity should therefore carry a technical risk rating, growth impact, implementation dependency and owner. The board can then distinguish low-risk housekeeping from architectural change and deliberate risk acceptance.
A useful savings register includes
Current annual cost, contract status and technical role.
New route, product, supplier, location or requirement.
Gross and net saving, implementation cost and payback.
Resilience, capacity, support and migration impact.
Owner, dependencies, milestone dates and verified outcome.
Begin before the renewal deadline
The highest-value work usually starts 12 to 18 months before material contract expiry. That creates enough time to test architecture, engage the market, construct an alternative where necessary and migrate safely before notice rights disappear.