France Telecom plunges €1bn in LLU broadband

By Matt Whipp

Posted on 9 Sep 2005 at 17:45

A senior executive at France Telecom has detailed his company's plan to spend €1bn on a three year drive to ramp up LLU expansion, including putting more than half its UK subscribers on unbundled connections.

The dramatic strategy is part of France Telecom consolidating its brands in its various territories, said Olivier Sichel, VP of France Telecom's home division. In France the Wanadoo brand will encompass PSTN and Internet services while in the UK the Orange brand will consolidate the mobile and Internet offerings.

Wanadoo currently has around 2.2m UK users on its Internet services in the UK, but little more than a third on broadband. Sichel said he wanted this figure to rise to nearer two-thirds in the wake of the unbundling drive.

Sichel said that unbundling was vital in order to offer the kinds of bandwidths necessary for the services that France Telecom is rolling out, such as VoIP, TV over DSL and videoconferencing.

Indeed, even technologies such as VoIP that should dent voice revenues for the French encumbent telco from its fixed line services was welcomed by Sichel as a means to attract broadband subscribers back to taking broadband from Wanadoo.

Jean-Yves Leonnec, Director of Middleware and Advanced Platforms at the company's Paris-based R&D centre said while revenues from voice services might decrease through VoIP, they would be offset by extra services such as voicemail, presence, and other incremental additional features.

France Telecom, along with others, has petitioned Ofcom to force BT to drop unbundling prices to bring them in line with those of the rest of Europe.

In June, BT agreed with Ofcom to do just this, and Sichel said that he is now 'happy with our relationship with BT'.

Yet the regulator has played a canny game with LLU to date. When broadband first surfaced in 2000, the then regulator Oftel looked to local loop unbundling as the 'key initiative to bring competition into the BT network for broadband services.' Yet in 2003, the FT reported Oftel describing LLU as nothing more than a 'niche area' that was contrived to 'produce a competitive threat' to BT to hasten its own broadband rollout.