France Telecom Upbeat on ADSL Market
By Catherine Bremer
Thursday November 22, 12:45 pm Eastern Time
MONTPELLIER, France (Reuters) - France Telecom said on Thursday it would invest 400 million euros ($351.5 million) over three years to provide households with high-speed Internet connections, denying that the market for those connections is dragging its heels.
Jean-Yves Gouiffes, head of the incumbent operator's fixed-line business, told a congress hosted by French telecoms think-tank Idate that he expected 80 percent of France to be covered by ADSL by the end of 2003, up from 55 percent today.
[Harry: 55 percent is still an amazing high rate give the low penetration rates in the USA.]
ADSL (asymmetric digital subscriber line) equipment enables companies to provide fast, high-capacity Internet connections down ordinary copper telephone lines by splitting voice and data into separate channels.
Analysts have said demand for ADSL connections in France may be flattening out as the lack of competition in the market keeps prices high. Many worry that investments could tail off as operators pour the bulk of their depleted coffers into funding the transition to next-generation mobile technology.
Gouiffes played down criticism from alternative operators that France Telecom's high fees for letting them into the local loop -- the lines linking households to local telephone exchanges -- are preventing the ADSL market from taking off.
``We are not seeing a slowdown in ADSL, and France Telecom is pushing this market,'' Gouiffes said, noting that a third of its ADSL subscribers said they were subscribing to Internet connections for the first time.
``Rather than putting the brakes on the development of broadband, as one sometimes hears, France Telecom is keeping its promise in giving a real kick-start to the launch of ADSL. We expect to invest 400 million euros over three years,'' he said.
NO WISH TO CONTROL THE ASDL MARKET
France Telecom lost its monopoly on the local loop in January, but new carriers such as Vivendi-owned Cegetel have so far failed to muscle in. They say France Telecom's entry fees are steeper than the European average.
Earlier on Thursday, Cegetel Chief Executive Frank Esser told Reuters that prohibitively high fees for new carriers to connect into the local loop were holding up the development of the ADSL market.
``France Telecom's conditions for entry to the local loop are unacceptable and we have rejected them. We cannot find a business model based on their pricing,'' Esser said, on the sidelines of the same conference.
Gouiffes responded in an interview, ``Our wish is not to control the ADSL market. We want competitors to come in to help develop the market. It's a problem of money -- it's difficult coming in as a new carrier, and unbundling (the process of opening up the local loop) is complicated.''
Europe, only just starting to de-monopolize the local loop, is around a year behind the United States in developing the technology.
Within Europe, Germany is far in advance, with around two million ADSL lines in place compared to just 500,000 in France.
Gouiffes said France should have a million ADSL lines in place by the end of next year.
He added that France Telecom is targeting a little over 50 percent of the overall French market for broadband, which, through DSL, cable or other technologies can offer Internet access speeds of up to 1.5 Megabits per second, roughly 25 times faster than a standard dial-up telephone modem.
[Harry: Either France Telecom expects to be forced to lower their rates by govenrnment and therefore are investing the money in order to try to get greater share before the CLEC's can compete or they are just trying to scare the competition away by announcing the build program with intentions of only carrying out part of it.] |
