Orange (NYSE: FTE) is shaping up for a dramatic 2007, during which it will ramp up its fiber-to-the-home (FTTH) deployment plans and take a giant leap towards a next-generation network (NGN) architecture as it chooses its key IP Multimedia Subsystem (IMS) vendor partners.

During an investor day held on Friday, FT said it would select its IMS partners during the first half of 2007, start testing new systems for commercial introduction by the end of the year, and then begin the gradual phase out of PSTN switches in 2008, starting with legacy Alcatel-Lucent (NYSE: ALU) MT25 switches. (See FT: IMS Is the Future.)

According to industry sources, a number of major vendors are battling for selection in FT's all-encompassing IMS procurement process, following an initial IMS implementation with Ericsson AB (Nasdaq: ERIC) for the carrier's fixed VOIP services. (See Vendors Unite for IMS Pitch.)

The carrier also announced it has completed its FTTH trials and is now entering its "early stage deployment phase," which will see up to 200,000 customers hooked up to fiber by the end of 2008. The carrier announced its limited trial in January 2006 and began the service in June in and around Paris. (See France Telecom Plans FTTH.)

FTTH trial
FT says it has laid 10,000 kilometers of fiber, passed 11,500 homes, and connected 500 of them, spending only €5 million (US$6.6 million) in capital expenditure. It chose a Gigabit PON architecture, with 64 customers provisioned by a single fiber, as that approach is the most capex efficient and saves on operational costs at the central office.

It offered a 100-Mbit/s symmetrical broadband connection, high-definition TV (HDTV), unlimited VOIP services, and connection and support services for €70 ($92) per month. FT says that among the main services and applications used by those that signed up were HDTV, video on demand, photo storage, and the "sharing of user-generated content." Next step for FTTH
Now FT is adding further services to its offering, such as online gaming, and extending its FTTH rollout deeper into the Paris area and nearby regions and, from June 2007, to 12 other French cities, including Lille, Lyon, Marseille, Poitiers, and Toulouse. By the end of 2008 it plans to have spent €270 million ($345 million) in capex to pass 1 million homes with its fiber, and have between 150,000 and 200,000 customers hooked up to the network.

This phase will lead to "the broader deployment of fiber to the home, which we foresee in 2009 and beyond, when there will be content and services available, which would justify such capacity for many of our customers," stated the carrier's CEO Didier Lombard.

FT's expansion plans follow hot on the heels of a nationwide rollout plan announced by its fiercest French broadband rival, Iliad (Euronext: ILD). (See Iliad Plans €1B FTTH Build.)

Iliad looks to be as tough a competitor in FTTH as it has been in the DSL market, as the upstart plans to offer its fiber-access package at the same price as its DSL package, around €30 ($39.30), less than half FT's trial service tariff.

IPTV in the UK, headcount cuts
FT also reiterated plans to launch an IPTV service in the U.K., building on its local loop unbundling expansion. The carrier now has its own DSL gear in 500 U.K. exchanges, and has about 160,000 broadband customers connected to that equipment. Now offering all its services using the Orange brand, it has about 1 million fixed broadband customers in total in the U.K., including 200,000 that also use Orange mobile services. (See FT Turns Orange.)

FT first outlined its international IPTV plans, following its successful launch in France, in January 2006. (See FT Plans Euro IPTV Assault.)

Orange will be butting up against two worthy telco TV competitors, though, in BT Group plc (NYSE: BT; London: BTA) and Sky , but believes its wholly owned and bundled mobile service will give it a competitive edge.

The international carrier also confirmed some financial targets for 2007 and updated on its headcount changes. (See FT Looks to 2007.)

FT began the year with 203,000 on staff, of which 121,000 were based in France. By the end of this year it will have 113,600 employees in France, having cut 9,400 posts and hired 2,000, for a net reduction of 7,400, or about 45 percent of the 16,000 headcount reduction planned for France in the 2006-2008 timeframe. The carrier plans to reduce its headcount outside France by about 1,000 during the same period.

— Ray Le Maistre, International News Editor, Light Reading