[Updated with errors fixed] A while ago we had pointed out that DSL might be a transition technology to fiber-based networks. Japan and its broadband operators certainly have been following that strategy. Now another broadband innovator, Free.fr of France is following suit and will launch a FTTH based network in 2007. Free has two million ADSL subscribers. For 30 Euros a month, you get 50 megabit/second, free phone calls to landlines and HDTV with PVR and some WiFi thrown in for kicks. James Enck points out that to Illiad’s has similar (oops! sorry about the screw up.. thank you all for pointing out the error in my pre-coffee post.) plans for what he quaintly calls the French fiber revolution. Esme has some details on all that. Apparently, Free stock is down 18% for the day on capex concerns. Can anyone confirm that.
Also:
Om, Iliad and Free are the same thing.
Or more exactly, Iliad is the entreprise that owns Free.
In French, we call it “une filière”, Free is a “daughter” of Iliad.
So the two news are really only one :
Iliad has announced today his plans for FTTH in France, using their “daughter” Free, and propossing 50 Mo/S for 29.95€ by 2007.
More info (in French) dans le blog de Jeremie Berrebi ( http://www.berrebi.com ) and in mine.
Regards,
L.i.B.
Unless I am sorely mistaking, Illiad = Free.
By the way, it’s Iliad (with one L)
According to Yahoo, Iliad is “only” at -7.5 %
http://fr.finance.yahoo.com/q?s=ILD.PA
Oops, I meant -11.5 %
L.i.B.
Hmm,
Remember when some American Telcos built fibre networks at light speed back in the dim dark fibre 90s. Well let us not forget how difficult this was to do and how the PTTs made life extremely difficult for these upstarts and drove them into chapter 11. In the local loop be prepared for some mean fighting as the PTTs have already tried to burn at the stake any local councils who attempted the same thing. To do so as a 3rd party operator will be certain suicide. Dont forget this IS seriously political. The government/local body own the land which the fibre is layed in while the PTTs often have legal rights of use. Bloody, very bloody. Also note those looking to WiMax should read the distance+speed reports very very carefully.
Joe> As one said, times they are changing. It’s now 10 years after and the world has revolved more than once. Telcos are no longer the to-be-feared behemoths they used to be. They’ve lost quite of market shares on all their lines of business. They ‘re painfully migrating from a monopolistic centralized technically minded organization to something more flexible and market oriented (at least they know they should try to do that). And they’ve definitively lost the innovation edge for the profit of smaller and more agile companies.
That said, they can still very much slow down the efforts of such younger companies to build an asset base. Ties with local politicians is one thing. At least for France, I very much doubt that it may have a significant long standing impact on the development of alternative carriers (should we still call them carriers?)? The Paris City Council has launched the initiative that is the basis for Iliad’s proposal. The city of Pau did it years ago and more are following. May be local people are fed up with big companies that pretend to provide universal service and act the contrary.
In my view, the most important part of Iliad’s announcement is that their FTTH network will be OPEN to third parties. This is a clear slap in the face of the big telcos that are painfully lobbying national and EU authorities to keep their future fiber networks closed. Such a walled garden logic is no longer the key success factor on the market. I wish someone at France Telecom will notice before it’s too late…
Marc,
Thanks for comments but I have to disagree with some of them. I think its important to use correct terms for each market entity. A PTT is very different from a Alternative carrier due to market position.
PTTs are market monopolies often heavily supported by governments. This is usually due to their large sharemarket presence. The only real competition is from cable companies but in Europe this is usually a disorganised farce, particularly in the UK. Checkout DSL underlying providers, the PTTs will be there smiling back at you with almost total domination. This is why local loop fibre is so important.
The PTTs in most cases are Marketing and Sales organisations. Engineers were decimated before privatisation. In fact local loop fibre is a very good reason why graduate engineers are important to all telcos right now. Agreed PTTs are slow, in fact they have to be as they must be seen to follow. However their Research knowledge is many years ahead and they tend to know how to push the envelope and get smacked for doing so. However some clever ISPs have beaten them a few times and hosting is well out of their reach now.
Um… Paris is one of the most difficult cities in the world to dig up. Perhaps quite rightly so given its beauty. However this makes it a trial for anyone installing new fibre. For this reason the sewer networks were being looked at as duct space. Too many secrets and gatekeepers to get through… but I guess the right people might be allowed.
Regarding France Telecom, BT, KPN etc. I wish they wouldn’t notice… what a wonderful world it would be.
However the future for telcos is services and the customer interface. Telcos have steadily lost direct contact with the high margin customer and have been relegated to pipe bandits who compete so much with one another that they have a low margin business. Only the PTTs still have direct customer interfaces and they are not a good example of how to deal with customers.
Bon Voyage!
Joe,
Thanks for introducing semantic rigor.
We’re talking about the same phenomenon. Incumbents are loosing their market shares in favor of more agile competitors. And there is nothing they can do about that apart from reinventing themselves from top to bottom and reverse, which is highly unlikely given their culture.
Iliad’s R&D team numbers in the ten’s. FT still has more than 3000 civil servants within its labs. And guess what? who appears to be the most innovative? Of course, Iliad is free-riding on other’s investment in standardization and developement of technologies. They also rely heavily on R&D from their suppliers. But isn’t it the goal after all? You named it: it’s all about marketing, sales and owning the customer. Technology is irrelevant. If it weren’t, Iliad would not allow third parties to use its own network.
cheers
“In French, we call it “une filière”, Free is a “daughter” of Iliad.”
LOL. In french we call it “une filiale” and not a “filière”.
In english it means “subsidiary”
Time to improve your english LostInBrit
Still some inaccuracies in the article even after the post-coffee corrections 😉
Actually as a Free subscriber you get ADSL 2+ 28Mbits/s ATM (20 Mbits/s IP) for 29,99 €/month.
They intend to rent the FTTH at the same tagprice (psychological ceiling for French) for their parallel 50Mbits/s access.
There is also an incredible idea merged with the project supported by Xavier Niel’s Iliad founder : for people with little means a non-profit Fondation will freely provide a low-band fiber-based connection to the Net (limited to mail and web) and free calls to emergency and social services