http://www.marketwatch.com/news/story/france-tel-approves-widespread- fiber/story.aspx
France Tel approves widespread fiber roll-out Last Update: 3:46 PM ET Dec 15, 2006 (Updates with additional quotes, details) PARIS (MarketWatch) -- France Telecom (FTE) plans to roll out fiber optic cable to ten additional cities in France by 2009 as the French telecom operator prepares to deploy one of the fastest and most widespread broadband networks in Europe. France Telecom launched a 100 megabit per second fiber optic pilot project in June this year, laying over 100,000 kilometers of cable in six districts of Paris and some surrounding suburbs. Although the project actually missed customer penetration numbers, attracting 500 instead of 1,000 new users as hoped for, France Telecom Chief Executive Didier Lombard said the regulatory climate was favorable enough to launch in additional cities. "Why are we going into the second phase?" he asked at an investor conference in Paris Friday. "We believe that ARCEP (the French telecom regulator) is going in the right direction and will adopt symmetrical regulation," he said. Symmetrical regulation would mean France Telecom, the company's incumbent telecommunications company, would be treated equally with smaller new companies and be able to keep control of its own network. Under the plan, France Telecom will only invest EUR270 million between 2007 and 2009, where fiber will be laid to Lille, Lyon, Marseille, and Toulouse among other cities. The company hopes to attract between 150,000 and 200,000 customers by 2008. After that, the network would be deployed on a mass market basis, Lombard said, declining to say either how much it would cost or what the return on investment would be. Fiber-optic networks are faster than conventional Internet connections and allow consumers to watch high-definition television and download movies in minutes instead of hours. This is a key for competing with cable companies, which also want to be the first to attract customers to their Internet and TV offerings. French telecommunications company Iliad SA also recently announced it would deploy a network in Paris, likely putting fire to the heels of France Telecom management to offer a similar service. However, Iliad's network would only cost customers EUR30 per month while France Telecom's is slated to cost EUR70 per month. Lombard said France Telecom planned to offer customers a sliding pricing scale depending on the services they requested, but didn't specify how he would keep customers from defecting to lower priced Iliad that will also offer a 100 mega bit per second network. Despite the new expense, France Telecom is keeping its information technology and network capital expense to sales ratio target for 2007-2008 at 10% to 11%. "We chose fiber to the home because a lot of services need 100 megabits per second and more," Lombard said. "At present fiber seems like a dream but five years ago no one heard of DSL (digital subscriber line). Now if people don't have it, it's a drama." The Paris-based group also said at the investor conference that it aimed to keep gross margins stable in 2007. France Telecom management also reiterated fiscal prudence saying the company was committed to a program of paying down debt and modest acquisitions. "I will not spend huge amounts of money to buy something," said Lombard. Sanjiv Ahuja, head of the mobile phone unit Orange, also tried to dispel rumors that France Telecom was looking to buy a mobile phone company in the U.K. "We are not interested in acquiring an existing mobile asset in the UK," Ahuja said. "Let me dispense with this rumor." -Contact: 201-938-5400 --~--~---------~--~----~------------~-------~--~----~ TELECOM-CITIES Current searchable archives (Feb. 1, 2006 to present) at http://www.mail-archive.com/[email protected]/ Old searchble archives at http://www.mail-archive.com/[email protected]/ -~----------~----~----~----~------~----~------~--~---
