France's telecoms watchdog Arcep on Wednesday called for operators to co-operate and share the burden of investing in next-generation super fast networks connecting buildings in urban areas with fibre-optic cables.
In a speech delivered to a conference, Paul Champsaur, head of Arcep, estimated the cost of a national roll-out of such a network at "several tens of billions of euros" over a decade. The extended network, commonly referred to as fibre to the home, gives users several times more bandwidth than existing DSL phone lines.
It also provides more control over connection speed and facilitates the deployment of bandwidth-consuming services such as high-definition TV and video on demand over the Internet.
"The economic equation is challenging. On the one hand investments required to develop super high-speed networks are quite significant, and on the other hand questions are raised about the additional revenues that can make these networks profitable," Champsaur said.
As a solution, Champsaur called for operators to cooperate and pool together their investments. "The pooling of civil engineering infrastructure work and of the cabling of buildings is to play a fundamental role," Champsaur said, adding that Arcep would encourage such pooling.
"It is absolutely necessary to establish a genuine co-operation between different players from the audio-visual and telecoms worlds so as to develop new economic models, new usages and innovative services," Champsaur said.
Champsaur pointed out that the roll-out of fibre was cheaper in Paris than in other French cities thanks to the capital's underground sewage system which facilitated cable-laying.
France's second-largest consumer broadband provider, Iliad, announced in September it would spend 1 billion euros ($1.3 billion) on a fibre-to-the-home network, centred mainly in and around Paris, by 2012.
Iliad's closest listed rival, Neuf Cegetel, which floated in Paris last month, is looking to step up investments in fibre-to-the-home and start making commercial offers in 2007.
Market leader France Telecom has said, however, that it planned a wait-and-see approach and was currently conducting fibre-to-the-home trials to measure demand and learn about the technology. Champsaur on Wenesday also called for telecoms operators to get more involved in the TV services and content market as they were becoming themselves broadcasters in their own right.
On Tuesday, France Telecom said it would create a film production unit in early 2007 that would co-produce 10 to 15 films a year and acquire film catalogues. France's industry minister, Francois Loos, said last month the country aimed to get about 15 percent of households wired with fibre-optic cables and connected to high broadband within the next six years.
Champsaur said in his speech some 11 million households were connected to high-speed Internet as of June 30, representing a 40.7 percent increase over the previous 12 months. Of these, 10.5 million were connected using DSL phone lines.
About 40 percent of households in France have a high-speed Internet connection, a significantly higher ratio than the European average of around 15 percent.
Champsaur said he expected France to reach 50 percent penetration "soon". He said about 1.5 million households in France now watched TV using an ADSL phone line Internet connection, of which a third subscribed to pay-TV services. "It is important to note that in terms of flow, ADSL is now the principal growth driver of pay-TV," Champsaur said.
By the end of 2006, Champsaur predicted France would count more than 4 million subscribers to 3G mobile services who on average spent more than 40 minutes watching TV on their handsets each month.
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