France's communications landscapes

France's communications industry is bringing high-speed wired, wireless and fibre-optic networking to its consumers.

Imagine the auto industry without France. Where would we be without Peugeot, Renault, Citroën, Michelin and Alain Prost? And imagine the global economy without French wine, cosmetics, cuisine or haute couture.

Fortunately, these French inventions are all present and correct. But consider telecoms: could this industry have evolved into what it is today without a Gallic contribution? If you're tempted to think 'oui', you'd better think again.

For a start, France wrote the very first page in the history of modern telecommunications. In 1792 - nearly half a century before the advent of the electrical telegraph - a French engineer named Claude Chappe began the construction of what would soon become the world's first national optical telegraph network.

Helped by his brothers, Chappe linked strategic cities and areas of pre-Napoleonic France with a network of more than 550 semaphore towers that spanned almost 5,000km. Visual signals were manually relayed from station to station using a clever system of pivoting blades.

Many of the technical parameters found in present-day wireless communications engineering (encoding, decoding, line of sight, data transfer rates, interference and network security among them) were already present in this pioneering system.

Fast forward a couple of centuries and France's influence on the international telecoms stage remains undiminished.

Take satellite communications. More than 90 per cent of all European, Middle Eastern and North African homes that are subscribed to cable or satellite television receive channels from the Hotbird family of satellites. Operated by Paris-based Eutelsat, the 13°E geostationary orbital position of the Hotbird fleet has enabled the development of multi-channel television across Europe.

Besides playing a prime role in the operation of communications satellites, France is also heavily involved in their design and manufacturing. Headquartered in Cannes, Thales Alenia Space is Europe's biggest satellite maker. A joint venture between Thales and Finmeccanica, the company has 11 industrial sites in France, Italy, Belgium and Spain.

From these facilities comes much of the technology behind both the space and ground segments of not only commercial satellite communications but also military, satellite navigation and science and exploration infrastructure in use or under development worldwide.

Fibre optics and FTTH

Fibre optics is another field where French engineering has been at the forefront of innovation. For a few years between the late 1990s and early 2000s, the fibre-optics division of Alcatel (now, Alcatel-Lucent) broke record after record for the fastest transmission of data achieved on fibre-optic cables.

That division was eventually sold to Dutch equipment maker Draka Communications in 2007. However, the Douvrin factory in the north west of France, which Alcatel transferred to Draka as part of the deal, remains Europe's largest optical fibre manufacturing plant.

When it comes to the deployment of fibre-to-the-home (FTTH) technology, France appears, at first glance, far from a world-beating nation. Countries such as Japan, South Korea, Taiwan, Hong Kong and the US all comfortably outstrip both the total number of subscribers and the penetration rate of the French FTTH market.

Europe is considered to have been slow to embrace FTTH. Of the around 35 million people that were estimated to have subscribed to FTTH services worldwide by the end of 2008, only 1.7 million were European.

Even within Europe, France doesn't make it into the top ten markets in terms of FTTH penetration, a category that Sweden led as of December 2008 with 10.9 per cent of all households, followed by Norway (10.2 per cent) and Slovenia (8.9 per cent). France is yet to hit the 1 per cent mark.

However, a completely different picture emerges if you look at the number of homes passed - that is, those that would be able to subscribe to an FTTH service today if they wanted to. Here, France boasts the largest number of FTTH-ready premises in Europe: some 4.5 million.

This figure suggests an unhealthy imbalance between supply and demand: of the 4.5 million homes passed by FTTH networks, only around 170,000 had subscribed by December 2008.

Closer examination reveals that this is likely to be a temporary imbalance. The vast majority of these as yet 'dark' fibre lines were only deployed during the past 24 months, in anticipation of burgeoning demand.

Interestingly, these FTTH rollouts are not coming from just one or two operators - as is the case in most markets. In France, strong competition has pitted several Internet service providers (ISPs) against each other. France Telecom, the incumbent, is offering download speeds of more than 2.5Gbit/s, a service that is already available in about 40 municipalities.

Other prominent French ISPs extending their fibre networks to the 'last mile' are Free (a subsidiary of the Iliad Group), SFR and Numéricable.

The latter - France's equivalent of Virgin Media after four of the country's largest cable operators merged into a single entity - has approximately 30 urban areas covered by a 100Mbit/s broadband service based on DOCSIS 3.0 technology.

Both Free and SFR are taking advantage of the sewer system in Paris and other large metropolitan areas to build their own fibre networks. By the end of 2009, Free says it will be able to connect 70 per cent of all premises in Paris to its FTTH network.

Frank Esser, chairman and chief executive officer of SFR, is aiming for an even greater fibre footprint in the capital: "We're in line with our stated objective of 80 per cent horizontal coverage of Paris by the end of 2009," he claims.

Vertical limit

Horizontal coverage is all very nice, but one of the main reasons why French ISPs have failed so far to connect more users to their new networks is an unresolved regulatory issue regarding the so-called vertical portion of fibre deployment.

Following the very successful implementation of local-loop unbundling (dégroupage) in France, which enabled one of Europe's most competitive DSL markets, national telecoms watchdog ARCEP is eager to ensure next-generation networks enjoy a similar, or even greater, level of openness.

With that aim in mind, ARCEP has devised an ambitious plan to allow FTTH operators to share network resources not only in public places but also inside private buildings.

For the public (or horizontal, street-level) portion of the networks, ARCEP is pushing regulation that will give all interested operators access to France Telecom's local-loop ducts. Inherited from the former state monopoly, these ducts provide the most sensible route to roll out independent fibre right up to the doorstep of every property in the country without having to dig prohibitively expensive new trenches.

Once the fibre of any given operator leaves the public domain to enter an individual property, ARCEP will force that ISP to share its local-area fibre network with competing operators. In multiple dwelling properties, this would benefit residents in two ways: it would eliminate the nuisance of multiple installations in common areas of the building; and - largely because of that - it would prevent the creation of mini-monopolies in each building by encouraging competition that would translate into lower prices.

After several trials and a recent consultation on a draft legal framework that specifies the technical and pricing terms for in-building infrastructure sharing, ARCEP chairman Jean-Ludovic Silicani is confident that the new legislation will come into force before the end of this year.

Only then, FTTH operators hope, will the French fibre revolution truly begin. As things stand, "vertical rollout of fibre is still an obstacle," admits Esser. And he urges: "We need to have a decision handed down [by ARCEP] as quickly as possible."

Vivendi SA

Standing tall among the biggest players in the French telecoms community is media and entertainment conglomerate Vivendi SA.

Created as a water company over 150 years ago, Vivendi's current businesses include: satellite television (CanalSat and Canal+); mobile telephony (SFR, in partnership with Vodafone); broadband (Club Internet, AOL, Tele2 and Cegetel, all of them now integrated under the SFR brand); music (Universal Music Group, which has U2, Mariah Carey, Rihanna, Marilyn Manson and Lady Gaga among its artists); and video games (Activision Blizzard, publisher of hits such as Guitar Hero and World of Warcraft).

According to Jean-Bernard Lévy, Vivendi's chief executive officer, efforts throughout the group's subsidiaries to reduce costs and structure most of their sales around subscription business models have allowed them to navigate through the global recession relatively unscathed. "There is of course an economic crisis going on around us. We see some consequences, but they are minimal and the impact on Vivendi is limited," says Lévy.

In a move designed to attract consumers in belt-tightening mode, Vivendi has recently launched a series of lower-cost packages for both of its satellite platforms. The new 'Pass Weekend' package on Canal+, for example, offers all of the DTH operator's regular channels, but only accessible from 7pm on Fridays till 9pm on Sundays.

"This offer should enable us to win more customers," says Bertrand Meheut, chairman of the Canal+ Group executive board. "Some people criticise these new packages, which they describe as 'low-cost offers'. They're not. They are premium products. It's like Chanel Numéro 5 - the same perfume but sold in smaller quantities."

Adam Thomas, media research manager at Informa Telecoms & Media, believes that using low-cost packages to alleviate financial pressure might only be a temporary solution, particularly for Vivendi's largest satellite TV operator.

"CanalSat's DTH service has long been the market's pay TV leader, but its subscriber base is now coming under pressure from rival free-to-air and low-cost pay platforms. It has already reacted by launching its own lower-cost offer, but it now must find a successful strategy quickly, or risk haemorrhaging even larger numbers of subscribers."

Research from Informa shows that pay TV penetration in France runs at around 49 per cent, just below the western European average of 51 per cent. French audiences have proved particularly enthusiastic about digital TV. "Around 80 per cent of TV homes are digital - well above the western European average of 63 per cent," says Thomas.

Starting in early 2010, analogue terrestrial broadcast signals will be gradually switched off in France. The schedule calls for the entire process to be completed by late 2011.

Thomas says there is scepticism that such a tight deadline will actually be met. "Despite some good progress in switching on new transmitter sites, this is still a major project to undertake and there remain doubts over whether this schedule can be achieved."

Sooner or later, though, digital switchover will be achieved. When that happens France will have written another page of its rich telecoms history.

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