24 January, 2006

The pitfalls of triple play

For several years now "triple play" has been heralded as a goal to be achieved by the telecoms companies.
The term "triple play" has different meanings for different players.
In France it is generally used to signify a combination of broadband Internet, digital TV and fixed telephony. The cable operators had clamoured for years to be allowed to provide a telephony service as the only way they would be able to make a living and continue in existence. Now that they have both the technical and the regulatory ability to do so, it has come too late. There has been a (long expected) complete shake-out of the French cable industry, and the arrival of VOIP telephony has eroded the telephone tariffs.
In the UK, where IPTV is a little slower in coming, I have seen the term "triple play" refer sometimes to a combination of broadband/telephony/wireless (note that Wireless means Wi-Fi access to the Internet and is not the 40s-50s ternm for broadcast radio), and sometimes refer to a combination of broadband/fixed telephony/mobile telephony. I suppose when IPTV becomes more widespread in the UK we will start to see operators talk of "quadruple play".
The advantage of triple play for the telcos is to enable synergy in the activities. They are able to put together attractively priced bundles.
The benefit for the consumer is hence lower prices.

Now, as subscribers to the French ISP "Free" ((Iliad group) are begining to find out, there is also a downside. At the beginning of this month, Free introduced a policy of charging for calls to some of the other telcos. The problem is compounded by the fact that the user does not always know in advance which network is used by the person he is calling, particularly if the number has been "ported".
Whatismore, Free charges more than France Telecom does for calling the same numbers. Too bad for those subscribers who opted for full unbundling (degroupage totale) - they have no option but to use Free to call these nunmbers.

Triple play ties the subscriber into one supplier. All eggs in the same basket. There is frequently a heavy financial or administrative penalty for cancelling.

20 January, 2006

France Telecom to test fibre optic to the home

France Telecom has just announced that it is going to test a very high speed broadband service to about 1000 homes in selected neighbourhoods and western suburbs of Paris using fibre optics. The areas have been selected as being "more receptive to new technologies", meaning richer, said Didier Lombard, France Telecom CEO at a press conference on Tuesday. [I wonder whether FT is making a mistake here - after all, when Canal Plus started in 1984, it concentrated its marketing efforts in the richer neighbourhoods, but soon found that it sold many times more subscriptions to the Eastern arrondissements of Paris and Seine St Denis than it did in the 16th]

France Telecom has decided to go directly to optical fibre technology (FTTH – fibre to the home), skipping the intermediate VDSL stage, as it will be more long-lasting; while VDSL could provide 50 Mb/s broadband, it is expected to be supplanted by optical fibre in the medium term. The aim of the trial is to gain experience in the technology and gauge user reaction– it is not intended as the first stage of a roll out of a massive investment plan in optical fibre.
The cost of cabling each home in the trial is of the order of €1000, so the cost of the trial is of the order of €1 million. "There is no question of cabling the whole country with optical fibre at this price" said Lombard, which is bound to fall.
The homes taking part will get a triple play offer, comprising broadband at 100 Mbit/s in both upload and download directions, unlimited telephone calls to landlines, two HDTV channels via IPTV and a range of other services such as video conferencing, for a price likely to be about €80 a month. Lombard explained that this price comprises a means of selecting people who are really interested in the technology, current triple play ADSL services (at a much lower speed, which in the best cases can attain up to 20 Mb/s in the download direction) charge from around E30 a month. The trial is to begin before the summer of this year. In 2007 France Telecom could begin more pilot trials in other regions.