FT unveils major broadband program

France Telecom will accelerate ADSL deployments and introduce new wireless and broadband satellite services beginning in the summer as part of a plan to make broadband Internet access available nationwide by 2005.

Presented by France Telecom chairman and chief executive Thierry Breton, the plan appears to be an attempt to undermine efforts by local and regional authorities in France to enter the telecommunications business. France's Senate is scheduled to vote this month on a bill that will allow these government authorities to become telecoms operators. The bill, already approved by France's other chamber, is an important catalyst for the public sector broadband activity.

Regional authorities have pushed for the new law, saying communications infrastructure is crucial to their economic development and providing broadband infrastructure for education and research institutions. Many authorities have criticised France Telecom for not providing broadband access in their areas. But more worrisome for France Telecom is that the local and regional authorities have money for their projects, making them potential competitors at a time when most new private telecoms companies have run out of money. The money is coming from the Caisse des Dépôts (a public financial institution that finances public sector projects), French government, and European Union. The financial muscle has allowed several local and regional authorities to form partnerships with France Telecom's competitors. According to the Caisse des Dépôts, there are 171 public communication infrastructure projects in various stages of development today in France.

"Local and regional authorities decided to create their own infrastructure when the new operators in France started to run out of money in 2000," explains Serge Bergamelli, assistant director of the Caisse des Dépôts' division that invests in technology and communications projects. "Many of the local and regional authorities, whose regions are sparsely populated, had counted on the new operators to provide the infrastructure that France Telecom had not given them."

In 2001, the Caisse des Dépôts created Bergamelli's division to invest in public sector information and communications technology projects. The Caisse des Dépôts has EUR238 million to invest in these projects—and it can take up to a 30% stake in each project.

The projects vary in scope from wireless in small villages to region-wide fibre networks such as a planned 500-route-km ring network in the Moselle department in eastern France. All 171 projects have completed initial feasibility studies. Six authorities are close to completing the construction of their projects and 10 more are ready to begin construction. Bergamelli expects an additional 20 to begin construction in 2004.

France Telecom did not talk about joint ventures at its press conference. However, the former monopoly carrier said that its regional offices would pursue initiatives in close liaison with local and regional authorities to assess customer demand and deliver responses adapted to broadband Internet needs.

Speaking at France Telecom's press conference, Breton said initiatives designed to make broadband Internet available to all users in France comprise a three-year EUR600-million plan:

  • Equipping local exchanges to provide ADSL access as rapidly as possible when service is requested by at least 100 customers in a given local area.
  • Equipping all exchanges of more than 1,000 lines with DSLAMs (ADSL access equipment) by 2005.
  • Offering three bidirectional satellite broadband Internet solutions designed for consumers and businesses in areas with partial or no ADSL service coverage.
  • Launching a series of major trials of broadband solutions that integrate satellite broadband Internet and WiFi networks.

xDSL remains France Telecom's broadband access technology of choice. By the end of last year, 1.4 million people in France had broadband Internet connections. The number of people will exceed three million by the end of this year since the customer base will have more than doubled in one year. ADSL technology was available to 74% of the population at the beginning of 2003, and France Telecom estimates that coverage will reach 90% of the country's population by 2005.

The number of DSLAMs installed in local telephone exchanges will jump from 3,000 today to 8,000 in 2005. About 7,500 km of fibre optics will be installed over the next two years to support the installation of new DSLAMs.

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