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France Telecom Updates on LTE, FTTH

Ray Le Maistre
2/24/2011

Orange (NYSE: FTE) provided an update on its FTTH rollout strategy and provided some detail around its plans for Long Term Evolution (LTE) deployment as it reported its 2010 results Thursday. (See France Telecom Battles Through 2010.)

The operator, also known by its global brand Orange, undertook an "extensive LTE trial in France" last year with Alcatel-Lucent (NYSE: ALU), and is now ready to perform "further LTE studies," including interworking with its existing 2G and 3G networks. (See AlcaLu Spouts LTE News.)

It expects the French regulator to start awarding 800MHz and 2.6GHz licenses (suitable for LTE deployments) from the second quarter of this year, and plans to select its network and device suppliers this year.

Network rollout is planned for 2012, with "friendly user trials" after mid-2012, according to the carrier's investor presentation that accompanied the financial results. Those trials will be followed by "targeted commercial" launches.

Rivals SFR and Bouygues Telecom have also been trialing LTE, so the market for enhanced mobile data will be just as tough as in 3G, and uptake is likely to be unspectacular during the first few years. In a recent Country Intelligence report, France: Data-Related Opportunities Abound in an Otherwise Saturated Market, Pyramid Research analyst Sylwia Boguszewska noted that she expects there to be nearly 12 million LTE users in France by 2015, accounting for about 15 percent of subscriptions. (See SFR Upgrades With NSN .)

In fiber broadband, the operator still plans to invest €2 billion (US$2.75 billion) in its FTTH rollout in the 2010-2015 timeframe, and noted that it spent just €60 million ($82.6 million) of that in 2010, with the vast majority (about 80 percent) invested during the second half of the year.

In total, FT plans to lay fiber-access broadband connections in 3,600 French cities by 2015, passing 10 million French homes by that year, and extending that reach to 15 million by 2020. (France has about 25 million households in total.) (See France Telecom Commits to FTTH and Europe's Back in Love With FTTH.)

The operator believes this deployment will lead to higher fixed-line ARPU (average revenue per user) levels as customers opt for the greater bandwidth that will enable new services such as multi-screen IPTV, 3DTV and 3-D gaming. (See FTTH Strategies Need Revamp, Says Analyst.)

Pyramid's Boguszewska expects FTTH to account for about a quarter of all fixed broadband connections in France by 2015, around 5.5 million lines, with strong competition for the incumbent coming from SFR and long-time triple-play specialist Iliad (Euronext: ILD). (See French Still Slow on FTTH Uptake.)

FT's management believes strongly in the power of its network to help it stand out from its Web services rivals, and is focused on network investment as a way to deliver enhanced customer satisfaction. When it outlined its five-year plan in mid-2010 it noted: "Orange reaffirms that its networks are its core business and its future. The Group has been built around its network and the expertise of its technicians, and its employees take great pride in that."

We'll raise a glass of vin rouge to that…

— Ray Le Maistre, International Managing Editor, Light Reading

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