Wholesale vs Retail: How the Broadband Market Works
Understanding the relationship between infrastructure builders and service providers.
The Hidden Supply Chain
The broadband market is more complex than it appears on the surface. When you buy a broadband package, you are dealing with a “Retailer.” But that retailer rarely owns the cables in the ground. Understanding the split between Infrastructure (Wholesale) and Service (Retail) is key to understanding why prices and service levels vary so wildly.
The Wholesalers: The Builders
These are the companies that dig the trenches, lay the ducts, and blow the fibre. In the UK, the main players are:
1. Openreach: The national incumbent. Historically part of BT, they own the vast majority of poles and ducts.
2. CityFibre: The largest independent challenger. They build exclusively Full Fibre networks in towns and cities.
3. Virgin Media / Nexfibre: Historically a closed network, but slowly opening up.
CityFibre is a Wholesale Only operator. This means they are strictly B2B (Business to Business). They do not have a call centre for homeowners; they do not issue bills to residents. Their customer is the ISP.
The Retailers: The Service Providers (ISPs)
These are the brands you recognise: Vodafone, TalkTalk, Zen, Giganet, etc. They rent the line from CityFibre and add their own “layers” on top:
- Backhaul Capacity: They buy bandwidth to connect the local CityFibre exchange to the wider internet. Budget ISPs might skimp here, leading to slowdowns at peak times (contention). Premium ISPs buy excess capacity to ensure full speed 24/7.
- IP Addressing: They manage the IP addresses. Some offer Static IPs, IPv6, etc.
- Hardware: They choose which router to send you.
- Support: They hire the staff to answer your calls.
Why This Matters to You
It explains why you can buy a 900Mbps CityFibre connection from Provider A for £29 and from Provider B for £45. The physical wire is identical. The speed of light in the glass is the same. The difference is entirely in the service layer: the quality of the router, the quality of the support, and the amount of backhaul bandwidth purchased.
Knowing this empowers you. If you want the cheapest possible connection, you can choose a budget brand, safe in the knowledge that the physical line is still world-class CityFibre infrastructure. If you need business-critical reliability, you can pay more for a premium ISP on the exact same line.