Bouygues Telecom to offer FTTx services over Numéricable’s network

France Early this week, Bouygues Telecom, the #3 mobile player in the French market announced that they would be offering triple play FTTB services starting Summer 2010. In 2009, Bouygues Telecom launched their triple-play BBox offering over ADSL over the remnants of the Club Internet unbundled network they purchased off Neuf Telecom back in 2007. They are now announcing a high speed internet offering.

Does this mean we'll have 5th fiber network in France? No. Bouygues Telecom will be using Numericable's network to carry its offer. In fact, they've been very clear on the fact that they didn't intend to deploy fiber themselves, as Olivier Roussat, the GM of Bouygues Telecom said in an interview in Le Figaro

"Thanks to our deal with Numericable, we have immediate access to 3.3 million potential customers at a time when FTTH deployment has barely started. We will be opportunistic [about network deployment], but deploying multiple parallel optic fiber networks is nonsensical. In the end, the consumer will have to pay! Competition should be on services, not on infrastructre. Common sense would have dictated the creation of a large physical network shared by all."

Some might think that, coming from a company that has done all it could to skewer MVNOs for years, the position is indeed an opportunistic one. Still, the announcement is interesting on two counts:

  • first of all, it means that end customers will have access to a high speed triple play offer that is not tainted with the "cable" label that has been dogging Numericable for a long time and still seems to be limiting their ability to sell Docsis 3.0 access despite their much higher coverage,
  • second, it means that Numericable itself is now aggressively embracing a form of open access; that might very well be a first in Europe, and it will be interesting to follow closely. From Numericable's standpoint, this is a very smart move, perhaps the only one left for a company that has burned a lot of cash to upgrade its network and doesn't seem to be able to sell the services to end customers fast enough to recoup on that investment.

One interrogation I have is on what exactly Bouygues Telecom is purchasing from Numericable. The announcements and interview skirt around the issue by using indifferently FTTB and FTTx, but I don't really understand how the service is built. Is Bouygues Telecom leasing dark fiber and in-building coax from Numericable and doing textbook FTTB, or are they buying a kind of end-to-end bitstream or capacity from Numericable, in which case it's really HFC? Might not be hugely relevant to end-customers in the short term, but it might become as usage evolves and demand for bandwidth increases (especially upstream). It would also be interesting – since this is potentially a landmark example – to understand at which level the wholesale is happening.

Irrespective of that though, this certainly promises more pressure on the FTTH guys (Orange, SFR and Free) who might have had the impression that they could take their sweet time about signing up customers since Numericable wasn't hugely successful with its HFC offers. That's no longer true, Bouygues is a known and trusted brand, with heavy marketing power. It will be particularly interesting to see if Orange's strategy of dragging the market to a halt through regulatory challenges will remain sustainable: Bouygues Telecom might now pre-empt a position in areas outside of Paris where Orange might have thought it wouldn't face any real threat for some time.

This sure is becoming interesting!