Orange Sticks to High-Fiber Diet
As Orange rolls out fiber-to-the-home (FTTH) in Europe, the operator doesn't appear to be bothered about the possibility of new competition from companies like Google entering the infrastructure fray.
Speaking to journalists and analysts in London on Thursday about Orange (NYSE: FTE)'s strategy and wide-ranging industry trends, Gervais Pellissier, the French incumbent's deputy CEO and executive director of European operations gave a Gallic shrug to the prospect of infrastructure newcomers. He said that companies from other sectors that are trying to enter the connectivity market might change their minds and questioned whether Google (Nasdaq: GOOG) will continue with its fiber deployment in the US, after the Internet giant recently announced it had put its Google Fiber project on pause. "My feeling is that they will not," he said. (See Google Fiber Hits Pause Button, Scales Back.)
Although he noted that Google isn't deploying fiber in Europe, he explained that the reason for his doubts about these new entrants in infrastructure builds comes down to experience. "These are new technologies but use old-ways skills," he said. "When you dig a trench to install a line, this is a new service but it is still old fashioned. A guy who is digging the trench to bring the line is not exactly what I would call a digital worker."
Fiber and 4G are the key technology pillars of Orange's overall convergence strategy and the operator is spending big on both this year. In the first nine months of 2016, Orange capital expenditure was €4.7 billion ($5.24 billion), up 5.3% compared with the same period last year. So far, the operator's fiber investments are 14.6% higher in 2016 than at the same stage last year, driven mainly by rollouts in France and Spain. (See Orange Earnings Buoyed by Spain, Africa.)
"[Fiber] is the technology for at least the next 25 years," said Pellissier. "We strongly believe in favoring the long-term technology, instead of upgrading the existing network year after year. You cannot consider that you will have some pieces of copper in your network [to connect customers] in 25 years."
"Not all operators have decided to go this way, but we have and are confident that it will continue to bear fruit," he added.
According to Pellissier, Orange had 3 million fiber customers as of the end of the third quarter, which is twice the amount it had a year ago, and nearly 17 million households are within reach of Orange’s fiber access in France, Spain and Poland.
Orange has recently said that 1Gbit/s speeds would be common for residential fixed-line consumers in France, Spain and Poland in 2018. (See Orange Forecasts 'Common' Gigabit by 2018.)
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