Tuesday, September 4, 2007

Free's to Introduce FTTH this Month

Free stated that it will introduce its FTTH service in Paris this month (September 2007). It stated that the regulatory environment in France has helped by providing access to France Telecom and cable company ducts and to provide for deployment sharing.

Free has also structured the financial approach to its FTTH deployment to improve its economics through 12 year leasing arrangements for real estate. It has also signed turnkey contracts for areas outside of Paris where payment is made at delivery.

Free has committed to a point-to-point Ethernet architecture rather than PON because:

  • It provides a full gigabit of bandwidth available to each home.
  • It is a better fit to a competitive carrier without a legacy network
  • CapEx is required only when installing a new paying subscriber rather than to provide the ability for people to subscribe
  • It fits an unbundled environment where unbundling creates security issues with a PON infrastructure
Free expects for its FTTH service to pass 163 thousand homes in Paris by the end of 2007 in the following arrondissements:

  • 19th 28,000 homes passed
  • 20th 28,000 homes passed
  • 15th 61,000 homes passed
  • 5th 24,500 homes passed
  • 1st 22,000 homes passed
It plans to start deploying in three more areas by December 2007, which will add another 78 thousand homes passed. It also has management agreements to connect over 70 thousand MDUs to this network. Free expects to add another 260 thousand homes passed outside of Paris by 2009 and 2010.

Free has committed 100 million euros to this project. It has confirmed that it deploy in Paris for 1,500 euros per existing subscriber. It expects that the revenues gained from converting these existing subscribers will cover the cost of this FTTH deployment.

The post in this blog from last week titled "Free will support two HDTV's on Fiber" explains what Free will offer to its fiber customer for 29.99 euros per month.

Free will also offer wholesale access to its fiber plant. It will support both point-to-point Ethernet and GPON architectures and the features of this wholesale service will be released by the French regulator, ARCEP. Free will charge a wholesale price of 15 euros per month per access for this wholesale service.

Free has an aggressive plan, but then it has established itself on similarly aggressive plans. It looks like this strategy will mean that it will set the pace in France for fiber broadband as it has set the pace for ADSL broadband.

The one thing I do not understand is the economics. 100 million euros does not seem like enough. It seems that 100 million euros for 330 thousand homes in Paris means about 300 euros per home passed. Even assuming economies for Ethernet vs. PON, it does not seem to be enough.

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