FR: Fibre broadband - €29,99 / month for 100 Mbits/sec

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Paris Sewers Give City of Light
A Fiber-Optic Edge


PARIS -- The sewers of Paris, which once spirited out partisans and revolutionaries, are ushering in a technology revolution.

Paris Mayor Bertrand Delanoe is offering telecommunications companies breaks on fees for using the city's infrastructure to lay fiber-optic cable through the city's 1,800-kilometer, or 1,120-mile, sewer system.

Iliad SA recently announced plans for networks that provide service that would be twice as fast as those planned for Germany by Deutsche Telekom AG and for the U.S. by Verizon Communications Inc. France Télécom SA has launched a pilot program in Paris to explore a fiber network that will likely be as fast as Iliad's.
But some analysts wonder if French companies are rushing to lay networks before a market for the services exists.

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.

Use of the underground sewers is crucial, because it would eliminate the need to dig up pavement and get rights of way from government authorities. The Paris sewer network is so interconnected and accessible that it reduces the cost of building a network by from 30% to 50%, according to analysts.

But wiring all of France with fiber -- even accounting for the sewer network -- could cost €7 billion ($8.9 billion) at conservative estimates at a time when competition has pushed the rates French customers are charged for the services to among the lowest in Europe.

"This will cost a lot of money, and I'm not sure why they're doing it," said Adrian Baschnonga, a telecom analyst at Ernst & Young in London. "They're spending money they don't need to yet."

Fiber is making headway world-wide, with Japan and South Korea in the lead, according to the Organization for Economic Co-operation and Development.

In the U.S., Verizon is laying a fiber network in the Northeastern states of New York, New Jersey and Connecticut to 18 million homes that will cost $18 billion. Deutsche Telekom's fiber plans cover 12 German cities and suburbs by year end to the tune of €500 million. Should German regulators grant Deutsche Telekom full control of its network, the company likely will hook up 12 million households in a total of 50 cities to the tune of €3 billion.

Deutsche Telekom and Verizon only plan to lay 50-megabyte-per-second networks, while French firms are offering customers the option to get networks that are twice as fast and up to one-third more expensive. Iliad, for example, will offer a standard 50 MBS package with the option to upgrade to 100 MBS. France Télécom's pilot project in Paris currently offers 100 MBS.
Verizon plans to charge most homes $90 to $140 a month for the service, but Iliad will charge about €30 a month for the same service.
In September, investors were so worried about the risks of Iliad's investment that they drove the firm's stock down 12% the day of the announcement to deploy fiber. The stock has since recovered and even risen. Credit Suisse reduced its target for France Télécom stock price to €19 from 20 on fears fiber would soak up 25% of free cash flow between 2009 and 2011. Recently, Credit Suisse raised its price target for France Télécom to €22 for other reasons.

In Paris Thursday, France Télécom eased 0.15% to €19.92, while Iliad declined 0.22% to €68.
Iliad expects to recoup its €1 billion investment in four-to-six years, but it could recoup it much faster if it went for a network that runs all the way into people's homes.

French fiber company Erenis only offers 60-MBS service and usually recoups its investment in three years for each building it wires, as long as at least 20% of occupants sign up. Erenis only wires cable to a building's basement rather than to individual apartments: That doesn't disturb 19th-century Parisian apartments, which are protected by zoning laws (exposed wires aren't allowed in hallways, for example) and are often delicately constructed.

"No one likes the Haussmann buildings messed with," says Olivier Baujard, chief technology officer of telecom-equipment company Alcatel SA referring to Paris's iconic architecture designed by Georges-Eugene Haussmann for Napoleon III. "Wiring to the home also adds about 30% to the cost."

France Télécom and Iliad executives say fiber, which is made of spun glass, is much cheaper to maintain than traditional Internet cables made of copper because it basically contains no electronic parts. If later down the line HDTV is put in every household and every personal computer is used to upload video, the two firms would be in the unique position of not having to upgrade networks.

"Why not spend the money now rather than later and be assured the speed is fast enough?" said Jean-Philippe Vanot, executive vice president in charge of network carriers and information technology at France Télécom. He cautioned that France Télécom hasn't made a decision to install 100 MBS, but was leaning heavily in that direction.

Telecom firms in France say the Parisian sewers -- with their rat-infested caves and gothic arches -- are a resource their counterparts elsewhere don't have and are the key to curbing costs. The mayor of Paris is encouraging firms to use the sewers by cutting access fees by 25% for the last 400 meters to the home -- traditionally the most expensive leg of a project. The goal is to hook up 80% of Parisians to a high-speed fiber-optic line by 2010.

During World War II, the Nazi's used Paris's underground network of caves, quarries and sewers as air-raid shelters. The French resistance used them as a base of operations. Two years ago, police discovered and closed a still-operating movie theater under the Seventh Arrondissement, complete with installed seats and a cocktail bar.

Many executives expect peer-to-peer content users -- sharing video and blogs, music and digital photos -- will surge during the next five to 10 years, thus requiring more bandwidth. But telecom-industry experts say 30 MBS-to-35 MBS service is enough for most homes for the foreseeable future. In France, development of high-definition-TV shows continues to lag behind as media executives are wary of making the investment before good delivery systems exist. Most households don't have HDTV, which takes up the most bandwidth.

"The question to ask is whether fiber to the home will be the technology in 30, 40 or 50 years," says Olivier Rosenfeld, Iliad's finance chief. "We think it will be."

Says Alcatel's Mr. Baujard, HDTV uses at most 15 MBS, an Internet connection uses five at most and voice-over Internet takes up nearly no bandwidth. Even a home with three HDTV sets and two PCs -- a situation rarely seen in France -- would need only 55-MBS service.

The push to offer such generous broadband services is seen as a marketing tool. Japanese and Korean providers that offer 100 MBS always win market share, even if people don't use the entire bandwidth, Mr. Baujard says. "You can make a marketing splash," he said.

But that kind of splash shaves money off the balance sheet far more than a standard ad campaign. "If it is a marketing tool it's a pretty expensive one," Mr. Baschnonga, says.

In the cutthroat world of French telecom, many companies say 100 MBS networks are absolutely necessary not only to attract new customers but also to retain current ones.

"People ask us if we're sure households need that much bandwidth," says Mr. Rosenfeld of Iliad. "Our answer is we don't know. We're offering it at €29.99 per month. Who will turn us down?"


More at: www.wsj.com


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Foxwood

I seem to recall that when Bord Gais refitted practically every gasline in the state in the 90's to facilitate the use of natural Gas, it made noises about running fibre optic cables at the same time, but wasn't allowed to.

Does anyone have any details on what was proposed, and what happened?

probe

Foxwood wrote:

I seem to recall that when Bord Gais refitted practically every gasline in the state in the 90's to facilitate the use of natural Gas, it made noises about running fibre optic cables at the same time, but wasn't allowed to.

Does anyone have any details on what was proposed, and what happened?

AFAIR that was akin to the ESB fibre network - i.e. city to city/town to town rather than door to door.

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watty

You really have to stop taunting us probe.

The Bord Gais and ESB fibre is for backhaul. It's possible mose of Bord Gais is just empty ducts, fibre can be cheaply added without digging.

The only things to door here are:
* eircom copper
* UPC cable (and some small cable operators)
* Wireless & 3G
* Some apartment blocks have Smart, Magnet fibre
*Adamstown and maybe some other developments have Magnet fibre

Magnet have deeper pockets than Smart and a more realistic buisness plan and more realistic pricing, hence are expensive for fibre compared with a BT sdl Bundle or WISP connection.

bk

watty wrote:

* Some apartment blocks have Smart, Magnet fibre

And just to point out Smart fibre is only 2m, with 60 SDTV channels and is more expensive then NTL who offer 6m and 120 channels