Published:
03-Nov-08
The French incumbent telco, France Telecom, is likely to fall well short of its target of connected FTTH customers by year-end 2008. Initial projections had aimed to activate 40,000 FTTH customers by year-end 2007 and 180,000 by year-end 2008.
The telco's 3Q 2008 results, however, claim 17,000 signed FTTH contracts, up from 14,300 in 2Q 2008 and 10,100 in 1Q 2008. Screen Digest estimates there were around 50,000 active FTTH connections in total in France as of 2Q 2008. At the same point, France Telecom claimed just shy of 500,000 connectable homes (or "managed agent agreements signed in passed buildings"), up from 345,000 three months previously; the telco aims to cover 1m connectable homes by year-end 2008.
Our take...
France Telecom faces competition from rival providers rolling out FTTH networks (Numericable, SFR, Free). The aggressive retail pricing and strong investment seen in the FTTH sector reflects a highly competitive French broadband market. A number of major players have exited in the last few years driving consolidation in the market, with the recent departure of Telecom Italia in 3Q 2008 adding to those of AOL, Tiscali, UPC France and Deutsche Telekom since 2005.
A number of technical and legal issues surrounding FTTH deployment have slowed apartments in blocks getting connected. This has affected not only take-up of France Telecom's FTTH services but also of other operators investing in FTTH - shown by the low number of FTTH connections countrywide. Both a lack of mutual agreements between operators for sharing of in-building wiring and protracted negotiations with landlords (who in many cases have been hesitant over legal rights or possible disruption to buildings) have been specific factors. Following a public consultation, however, the telecoms regulator Arcep published recommendations in October 2008 that should help speed deployment and increase FTTH take-up in the country:
(i) Those operators which have laid in-building wiring must supply connections to third parties to provide apartments with access - technically, this connection can be provided in a variety of ways.
(ii) This connection should be via a shared access point on public land outside the building block.
(iii) The existing operator must supply third parties with necessary information on eligible target apartments.
Additionally, Arcep proposes that a single operator should exist per building, with final connection to homes financed between FTTH ISPs offering services. Further, Arcep has published a sample agreement for landlords negotiating in-building rollout which should improve dealings and deployment as it serves as a legal reference contract between building owners and operators.
Nonetheless, while these recommendations are useful in speeding rollout, exact technical details and tarriffs have yet to be set by the regulator on sharing agreements which may still prove an obstacle to allowing maximum opportunity for FTTH to take off in the country.
France,
