Before we get into this, let me make one thing clear: this article is pure speculation. We have no insider information about this, neither have we talked to anyone inside Free about it. It’s very likely we’re wrong. But wouldn’t it be exciting if we weren’t ?
10 days ago, at the end of the analyst event around its 2016 annual results, Free CEO Xavier Niel made a casual remark that on Tuesday 14th they would launch an offer that would make its competitors very unhappy.
— Fabienne Schmitt (@FabienneSchmitt) March 7, 2017
The French tech press and Free's numerous fans have been speculating ever since about what it might be. We have a theory.
Not many people know this, but Free signed a deal in late 2012 with Orange to co-invest in fiber deployments in what the French regulator calls Zones Moins Denses (Less Dense Areas). In those areas, the network infrastructure will be shared and open.
In those areas, Free has been trialling 10G-EPON technology. Some customers are connected, but until now the service offered was identical to that available in areas where Free deployed fiber on its own. Free is the only player in France to have deployed point to point fibre, and in these less dense areas that is also what is being deployed.
Free's footprint of addressable fiber customers today is around 4 million. We're thinking that would be enough of a critical mass to try one of the tricks they pulled back in 2004 with ADSL. Back then everyone in the market was offering ADSL with segmented offers, and the highest advertised speed was 8Mbps. Free was offering "maximum speed" to all of their customers, ie. up to 8 Mbps.
Then they announced that they would be replacing their ADSL with ADSL2+ in all of their central offices, and that all customers would still get maximum speed (now 15Mbps). This sounds insignificant today, but back then it was a huge deal: competitors expected to phase ADSL 2+ and keep segmenting their offers and suddenly customers had a choice of a cheaper and better option (including TV and Telephony).
This single move cemented Free's ascendence in the market and allowed them to become the second fixed broadband player in the market. They lost that position when Numéricable bought SFR two years ago, but actually just regained it organically in 2016.
So here's our thinking: not waiting for equipment obsolescence to replace it with newer, better and faster equipment is in Free's DNA. They have a footprint of 4m addressable customers today but only 8% take-up on that footprint (310k customers).
We think they're about to announce the launch of a 10G offer on their entire footprint with customers currently getting 1Gbps being offered 10Gbps. And we think their competitors will indeed find the joke very very unfunny.
It would mean a significant investment for sure: not only in replacing OLTs in most of their (dense area) footprint but also replacing ONTs over the entire existing customer base. But then again you're better off doing that when you have 8% take-up than when you have 30%.
We could absolutely be wrong, as I've said above. But we feel this is so much like the old, provocative Free that it feels like a very real possibility. And wouldn't it be just awesome if it was ? Listening to the pundits wondering about what could customers possibly want with 10Gbps or how PCs and other devices can't handle so much bandwidth for weeks on end would give Free a ton of free publicity, and they love free publicity. Who wouldn't?