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The chances of a third ultrafast network reaching 40 per cent fibre-to-the-premises coverage are "highly unlikely", a new report has said.

Earlier this year, Ofcom published its Strategic Review of Digital Communication, which outlined a strategy to promote the rollout of ultrafast broadband facilities on a large scale, based on cable and fibre lines.

One of its key recommendations is to support investment by rival providers to make the market more competitive and reduce the country's reliance on Openreach.

Ofcom hopes to achieve this goal by improving access to Openreach’s network of telegraph poles and its ducts - the underground tubes that carry telecoms cables. This will enable competitors to connect their own fibre optic cables directly to homes.

However, a new report by Analysys Mason, commissioned by BT, does not believe building rival ultrafast broadband networks will yield positive results.

Indeed, the report says a new entrant would only find it financially viable to deploy to two million homes if it was achieving a market share of 25 per cent.

Estimates also suggest that if the new operator achieved a 20 per cent market share, coverage would be around just four per cent.

Matt Yardley, a Partner at Analysys Mason, added: "The UK has a highly competitive broadband market, but our economic modelling suggests that encouraging a third separate network to invest in covering more than five to ten per cent of the country will be extremely difficult to achieve."

Speaking to the Financial Times, an Ofcom spokesperson said: "We know from discussions with major operators that there is significant interest in laying fibre using BT’s network. 

"Progress is happening each week and smaller operators are building fibre networks in cities across the UK. The future is fibre and we expect BT to play its part in making that happen."

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