Earlier this week, French regulator ARCEP released the most recent NGA numbers it has collected from the various players in the market. France currently has 50.000 homes subscribing to FTTH services and 180.000 homes subscribing to a HFC cable offer. The progression from six months ago is not insignificant, but the success rate compared to the announced 650.000 homes passed for FTTH alone is not good, to say the least.
There is, however an ambiguity in this homes passed figure. The French terminology in the ARCEP report (foyers raccordables) suggests that these homes can subscribe to the service when in fact, for the most part, they can't. This is due to the way the service providers report these figures, describing not the homes they have physically connected but the buildings they pass. This, at least, is what the service providers themselves tell me.
The issue that remains crucial in the French market is therefore that of fibering up the buildings, and while the regulatory framework for that has been laid out for comment by ARCEP and recently endorsed by the competition authorities, France Telecom had, until recently, protested that this framework killed their business model and seemed to be lobbying strongly against it, having even threatened to pull out of fiber deployment altogether. But it looks now like their official position at least is changing. It looks like the way is paved for a law to now be passed making that framework official (meanwhile, France Telecom is protesting about the deployment model for Tier 2 cities, but that's a story for another day).
Right now though, what we are looking at is a very low take-up rate for deployed infrastructure as a consequence of this issue with in-building deployment. The disagreements on the legal framework may in part explain this slowness, but I'm convinced that it's not by far the only reason.
The main issue in my opinion is that FTTH operators have seen landlords and building managers (syndics) as a hurdle, not as part of the ecosystem.
When I was in Sweden last week, the vital role of landlord associations in shaping the FTTH market struck me once again. More than perhaps any other player in the market, regulator and service providers included, they were instrumental in establishing the service delivery model. They did this by understanding the benefits they would derive from fiber deployment (avoiding customer lock-in, higher rents, building management opportunities...) and by acting collectively. They decided to take some of the costs of vertical deployment upon themselves in exchange for an increased control on shaping the service delivery model (and avoiding a legacy model that had caused them only pain...)
The landlords and building managers in France are a lot less united, that's for sure. But they also haven't been addressed by service providers as entities who could benefit from the fiber deployment, just as someone who needed to give their go-ahead (and perhaps would ask for a well-padded envelope in exchange.)
As a consequence, I'm not convinced that the new legal framework will really accelerate things unless Orange is serious about its change of minds on the framework. Orange, like all incumbents, has a clear advantage in dealing with in-building issues: they have been delivering copper services to these buildings forever. They know who the decision makers are, they probably have huge databases of buildings in France and who you need to speak to to get things done.
If they act upon it, then all three operators could be present in Paris quite fast. If they don't, Free and SFR are going to struggle in clearing this jungle for a good while before anything happens. Unless they can come up with something that the landlords and building managers want.
More generally, I see very few service providers taking an ecosystem view to their deployments and trying to understand what the benefits are to all of the players involved and not just to themselves and the end-customer. I think if FTTH is going to accelerate its deployment, this 360 view needs to happen, and it needs to happen fast.
This post has been cross-posted to my Yankee Group blog.