Analysys Mason was appointed by six French governmental and public bodies to conduct a prospective study on the services that would justify the need for ultra-fast broadband (UFBB) and the impact that these services will have on the business model of UFBB network deployment in France.
As part of the study, Le très haut debit : nouveaux services, nouveaux usages et leur effet sur la chaîne de la valeur (Ultra-fast broadband in France: new services, new uses and its impacts on the value chain), Analysys Mason looked at the specific situation in France and also benchmarked the drivers for UFBB network roll-out against other countries leading UFBB roll-out (e.g. Japan, the United States, Sweden…).
Analysys Mason expects that in the medium to long term, new UFBB-specific services (based on enhanced over-the-top services, higher definition video formats or advanced cloud computing) will likely emerge to create an increased demand for UFBB. However, in the short term, based on a review of the current situation in France and on international benchmarks, no killer application justifies the need for UFBB in France. In spite of UFBB’s technical superiority over standard broadband, French consumers do not currently clearly perceive the benefits of UFBB services over broadband services due to local market conditions such as:
the high performance of broadband offers, mostly based on a good quality copper network and DSL technologies,
a high broadband penetration rate, and
the good value for money of existing offers.
Analysys Mason’s latest study also explains that “given the high amount of investment required by nationwide UFBB deployment, the financing involves taking into account externality factors which cannot possibly be factored in by private players. This is particularly true in the current context of sharp changes in the value chain induced by the emergence of over-the-top services and connected TVs”. In fact, the expansion of over-the-top services and connected TVs reduces the potential for operators to generate incremental revenue through additional services, notably video, which complement UFBB access. This could be one of the factors preventing operators from deploying UFBB network.
Analysys Mason’s international benchmarks indicate that governments that are willing to foster large-scale UFBB deployments have either adopted strongly interventionist policies or regulatory frameworks favouring UFBB. Besides, other factors like competition between DSL operators and cable companies strongly drive the deployment of UFBB. For example, incumbents such as KPN (Netherlands), Belgacom (Belgium) and BT (UK) are rolling out fibre access networks fast to compete with cable operators.
You can view a copy of the Analysys Mason report on ultra-fast broadband at http://www.arcep.fr/index.php?id=8571&L=1&tx_gsactualite_pi1[uid]=1496&cHash=df7940c8cb