Ning
August 16th, 2004, 06:33 AM
France is currently charging ahead in terms of DSL performance in the EU. In Broadband@Ovum's top-ten DSL benchmark, France is top of the leader board in terms of growth, with a rate of 120% over 2003. Although it does not have the fastest growing market, France's impressive growth rate, shown in Figure 1, should see it becoming the largest DSL country in the EU by the end of the year - a position Germany has held since 2000.
Figure 1 France is quickly catching Germany
http://www.ovum.com/go/content/images/0265732.GIF
As well as making it the biggest DSL EU country, such growth has also vastly improved France's position in terms of DSL penetration. A year ago France lay in eighth position in the EU, it is now fourth behind Belgium, Norway and the Netherlands. Germany, which was in fifth position, has sunk to eleventh, whilst the UK remains in a lowly thirteenth place, although the UK has a healthier cable modem market than both France and Germany.
What has kick-started this sudden stellar performance? Although operators will claim marketing and innovative service packages had something to do with it (and there is some truth in that), mainly it all comes down to price.
With flat-rate offers in the region of euro15 for 512kbit/s and euro30 for 2Mbit/s (both through competitive carriers), France has some of the lowest DSL prices in Europe. It is rumoured that 512kbit/s could be available for euro10 by the end of the year. Such an increase in customers spurred on by cheap pricing goes to prove the theory that market share, to some extent at least, can simply be bought.
Where does this leave the other operators, and in particular France Telecom? Although it does not have the lowest market share of the European incumbents (BT still holds that title) it has certainly been losing its market share at an alarming rate - 15% over the past year, down to 49%. France Telecom's lowest price is just under euro20, but that is for 128kbit/s and is volume based. Joining the competition by severely cutting prices will hurt France Telecom's plans for DSL profitability, and yet by doing nothing it will only see its retail market share slump further. This is a real dilemma for France Telecom.
What of the competitors? Surely low prices such as euro10 or even euro15 for 512kbit/s are unsustainable without additional revenue streams, even with France's low local-loop unbundling prices? Both Free and Neuf are offering value-added services such as IPTV, but only time will tell if they can succeed in increasing sufficient extra revenues to compensate for such prices.
One group that's not complaining is the consumers - it looks like they can't get enough, and as I get ready to pay my euro35 bill for my basic 512kbit/s, who can blame them?
http://www.ovum.com/go/content/c,49063
In french :
http://www.vnunet.fr/actualite/marche/la_france_bien_placee_devenir_championne_haut_debit/12626/2004/08/12/pme/index.html
Figure 1 France is quickly catching Germany
http://www.ovum.com/go/content/images/0265732.GIF
As well as making it the biggest DSL EU country, such growth has also vastly improved France's position in terms of DSL penetration. A year ago France lay in eighth position in the EU, it is now fourth behind Belgium, Norway and the Netherlands. Germany, which was in fifth position, has sunk to eleventh, whilst the UK remains in a lowly thirteenth place, although the UK has a healthier cable modem market than both France and Germany.
What has kick-started this sudden stellar performance? Although operators will claim marketing and innovative service packages had something to do with it (and there is some truth in that), mainly it all comes down to price.
With flat-rate offers in the region of euro15 for 512kbit/s and euro30 for 2Mbit/s (both through competitive carriers), France has some of the lowest DSL prices in Europe. It is rumoured that 512kbit/s could be available for euro10 by the end of the year. Such an increase in customers spurred on by cheap pricing goes to prove the theory that market share, to some extent at least, can simply be bought.
Where does this leave the other operators, and in particular France Telecom? Although it does not have the lowest market share of the European incumbents (BT still holds that title) it has certainly been losing its market share at an alarming rate - 15% over the past year, down to 49%. France Telecom's lowest price is just under euro20, but that is for 128kbit/s and is volume based. Joining the competition by severely cutting prices will hurt France Telecom's plans for DSL profitability, and yet by doing nothing it will only see its retail market share slump further. This is a real dilemma for France Telecom.
What of the competitors? Surely low prices such as euro10 or even euro15 for 512kbit/s are unsustainable without additional revenue streams, even with France's low local-loop unbundling prices? Both Free and Neuf are offering value-added services such as IPTV, but only time will tell if they can succeed in increasing sufficient extra revenues to compensate for such prices.
One group that's not complaining is the consumers - it looks like they can't get enough, and as I get ready to pay my euro35 bill for my basic 512kbit/s, who can blame them?
http://www.ovum.com/go/content/c,49063
In french :
http://www.vnunet.fr/actualite/marche/la_france_bien_placee_devenir_championne_haut_debit/12626/2004/08/12/pme/index.html