NGA deployment: lessons from France
Infrastructure competition has played a primary role in the development of France’s consumer broadband market. This provides an important context for next-generation access in terms of commercial strategies, regulation, and policy. The first stage of next-generation deployment in urban areas is notable in that all players, not just the incumbent, have signaled a clear preference for fiber to the home (FTTH). Deployments are taking place within the new regulatory framework created to allow for multi-operator deployment of FTTH in dense areas. However, in terms of actual high-speed deployment, cable operator Numericable has set the bar high and established a significant lead. Telcos face important challenges in developing an effective FTTH business. These include complexity and delays in connecting buildings and homes, other investment priorities, and little maneuverability in high-speed broadband pricing.
Table of Content
Executive summary
In a nutshell
Ovum view
Key messages
Competitive and flat-rate triple-play pricing limit revenue potential for high-speed broadband access
Numericable: using high-speed broadband deployment to gain a market lead
Governments must intervene carefully in NGA as timing is important
NGA deployment is political, complex, and lengthy
Context: France’s broadband environment
Infrastructure competition has driven broadband growth
Infrastructure competition has set a precedent for next-generation access
NGA regulation, policy, and government positioning
Overview
The law to modernize the economy: implications for multi-operator deployment
Geographically differentiated remedies
Obligations that apply in all areas
France’s digital strategy: cash for NGA, but how will it be spent?
France’s “big loan” includes €2 billion for NGA
Uncertainty over allocation is adversely impacting rollout
Operator investment in sweet spots
All players have outlined fiber ambitions
This time, cable has set the agenda
France Telecom and FTTH: somewhat ambiguous
Regulatory uncertainty has played a part, but dubious business drivers are more important
Altnet investment in FTTH: the low-hanging fruit
Deployment criteria: density, market share, and ease of deployment
SFR: integrated network strategy
Slow uptake: vertical connection is complex for telcos
NGA revenue generation is challenging
France’s fixed triple-play bundle pricing: a vicious circle
Video-based services provide a limited upside
Deployment costs: a key sensitivity
Further mileage in LLU: a rewarding option for altnets
Executive summary
In a nutshell
Ovum view
Key messages
Competitive and flat-rate triple-play pricing limit revenue potential for high-speed broadband access
Numericable: using high-speed broadband deployment to gain a market lead
Governments must intervene carefully in NGA as timing is important
NGA deployment is political, complex, and lengthy
Context: France’s broadband environment
Infrastructure competition has driven broadband growth
Infrastructure competition has set a precedent for next-generation access
NGA regulation, policy, and government positioning
Overview
The law to modernize the economy: implications for multi-operator deployment
Geographically differentiated remedies
Obligations that apply in all areas
France’s digital strategy: cash for NGA, but how will it be spent?
France’s “big loan” includes €2 billion for NGA
Uncertainty over allocation is adversely impacting rollout
Operator investment in sweet spots
All players have outlined fiber ambitions
This time, cable has set the agenda
France Telecom and FTTH: somewhat ambiguous
Regulatory uncertainty has played a part, but dubious business drivers are more important
Altnet investment in FTTH: the low-hanging fruit
Deployment criteria: density, market share, and ease of deployment
SFR: integrated network strategy
Slow uptake: vertical connection is complex for telcos
NGA revenue generation is challenging
France’s fixed triple-play bundle pricing: a vicious circle
Video-based services provide a limited upside
Deployment costs: a key sensitivity
Further mileage in LLU: a rewarding option for altnets
List of Tables
Table 1: Regulatory and legislative measures to facilitate deployment of FTTH/B
Table 2: Operator investment in fixed NGA
Table 3: Quarterly growth in FTTH deployment
Table 4: Triple-play pricing: non-fiber and fiber
Table 1: Regulatory and legislative measures to facilitate deployment of FTTH/B
Table 2: Operator investment in fixed NGA
Table 3: Quarterly growth in FTTH deployment
Table 4: Triple-play pricing: non-fiber and fiber
List of Figures
Figure 1: Development of competitor DSL-based access: 2005–2009
Figure 2: Broadband market share and number of subscribers (000s): 2006–2009
Figure 3: Yearly FTTH capex, Iliad Group
Figure 4: Homes passed and subscribers, 4Q09
Figure 5: Control of network costs by the move to all IP
Figure 6: Orange consumer ARPU: 1Q07 to 4Q09
Figure 1: Development of competitor DSL-based access: 2005–2009
Figure 2: Broadband market share and number of subscribers (000s): 2006–2009
Figure 3: Yearly FTTH capex, Iliad Group
Figure 4: Homes passed and subscribers, 4Q09
Figure 5: Control of network costs by the move to all IP
Figure 6: Orange consumer ARPU: 1Q07 to 4Q09
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