France takes stock of FTTH growth

In France, where unemployment is at a record high, GNP growth is near zero, and President François Hollande’s popularity rating is plummeting, the telecom sector provided a glimmer of better economic days with the announcement of two milestones this month-- the number of fiber to the home (FTTH) subscribers had reached 500,000 and more than 10 million households had been passed by superfast broadband networks.

The increase in network deployments and take rates is in part due to France’s Superfast Broadband Plan, launched a year ago and piloted by a task force in the country’s Ministry for the Economy and Finance as part of a campaign pledge by Hollande.

Under the plan, 20 billion euros will be invested to bring superfast broadband service nationwide by 2022. France and the European commission define superfast broadband as a downstream bandwidth exceeding 30 Mbps.

Funding for the plan will come from public and private sources. Approximately 80% of France will be covered with FTTH networks. The remaining areas will be covered with a mix of technologies including VDSL2, CATV, 4G, and satellite. An initial goal of 50% nationwide coverage has been set for 2017.

Fleur Pellerin, minister delegate with responsibility for small and medium enterprises, innovation, and the digital economy, and Arnaud Montebourg, minister of industrial renewal, reaffirmed President Hollande’s pledge to provide superfast broadband access to everyone in France during an update meeting at the ministry. The plan, they emphasized, is aimed at stimulating the economy, competition, creating jobs – 20,000 according to government forecasts -- and eliminating the digital divide. As one of its first steps, the government will provide all French primary schools with a superfast broadband connection by September 2014.

Private operators will build networks in the most densely populated parts of the country, which account for 57% of the population, while local and regional authorities will build in the less densely populated areas where the remaining 43% live.

Under the task force’s guidance, private operators and territorial authorities will sign agreements for the construction of the networks, which the government estimates will require investments of 6 to 7 billion euros. To avoid duplicate networks, an operator selected to build in a designated territory will have to lease infrastructure or capacity on an equal basis to its competitors. The rule does not apply to some of France’s largest cities.

In France’s less dense areas, where there is no private funding to carry out the plan’s goals, the government has earmarked 3 billion euros in subsidies for network projects and will offer long-term, low-interest loans to territorial authorities. Since the plan’s launch last year, the government has received funding assistance requests from 56 local authorities and has allotted 940 million euros to date.

Antoine Darodes, the head of the French Superfast Broadband Task Force, said that at the end of 2013 some 3 million households had been passed with FTTH networks, 8.6 million by FTTC/FTTB CATV networks, and more than 1 million by VDSL2 networks.

At the end of the third quarter 2013, the total number of superfast broadband subscribers was 1.8 million, a 400,000 increase from the previous year. During the same period the number of FTTH subscribers increased from 270,000 to 465,000 – a 70% rise. The FTTH take rate has been growing at a healthy 10,000 households per week since late last year, which pushed the national number of subscribers above the half million bar this month.

Demand from French network builders has made France Europe’s largest fiber user, said Jacques de Heere, president and CEO of Acome, the French fiber and cable maker. Since the middle of last year, his company has been producing more fiber-optic cable than copper cable.

According to Richard Mack, market analyst at CRU, the French market for cabled fiber jumped from 2.6 million km in 2012 to 4.5 million km in 2013 and will continue to grow in 2014.

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