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One of the largest countries in Continental Europe, France consists mostly of flat plains or gently rolling hills in the north and west while the remainder is mountainous, especially the Pyrenees in the south and the Alps in the east.

 

France has the second highest population in Europe with 60 million people living in 24.7 million households, which is similar to the UK, where 59.7 million people live in 25.1 million households. Germany has Europe's largest population, with 82.3 million people living in 38.9 million households. France has a population density of 108 inhabitants per square kilometer; less than half the population density of the UK (244 inhabitants per square kilometer) and Germany (231 inhabitants per square kilometer), though far greater density than Sweden (20 inhabitants per square kilometer).

 

The telecommunications sector in France is regulated by the Autorité de Régulation des Communications Electroniques et des Postes (ARCEP), which until May 2005 was known as the Autorité de Régulation des telecommunications (ART).

 

Being one of the more developed nations in terms of ICT, the PC and internet penetration rates in the country are high; 53% of the French population had access to a PC in 2004, while internet penetration stood at 18.5% of the population or almost 40% of households at the end of 2004.

 

Broadband accounted for 45.5% of all internet subscriptions in the country at the end of 2004. According to the OECD, France had a broadband penetration rate of 10.6% of the population at the end of 2004; this equates to around 26.4% of households.

 

As well as common end-user applications such as email, web browsing and eCommerce it is known that French businesses have been using VoIP and VPN since 2003, while residential users have been able to access VOD and TV over broadband services since 2004. This makes France one of the few European markets where TV services are already commercially available over broadband.

 

TV services over broadband are possible due to the availability of high bandwidth or 'second generation broadband', through the use of ADSL 2+ technology. These services, from 2Mbps up to 20Mbps, are available in France because of the high numbers of local loop unbundling (LLU) operators in the country; at least 5 major operators fully unbundling or sharing LLU. LLU has given operators the freedom to offer more customised and varied services. The 1.6 million unbundled local loops in France makes it Europe's market leader for LLU at the end of 2004.

 

 

Growth in Broadband Connections

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With around 6.8 million connections, France is ranked as the 2^nd largest broadband market in Europe, behind Germany. (OECD, Dec.2004)

 

The French broadband market is currently the 5^th largest in the OECD. It trails the US, Japan, Korea and Germany but leads other major markets such as Canada, Italy and the UK. (OECD, Dec.2004)

 

With higher growth than Germany, and being only narrowly behind in subscription numbers, it is expected that France will become the largest broadband market in Europe during 2005, with the UK following closely behind.

 

'First generation broadband' household coverage is lower in France than the UK; 85% of French households are able to receive 1Mbps services compared to 93% in the UK, while 80% of households (or 90% of the population at the end of 2004, as stated by France Telecom)are able to receive 2Mbps compared to 84% in the UK. France is however one of the leading European nations in terms of 'second generation broadband' coverage; 74% of households can access 4Mbps services, while 68% can access 8Mbps services. Sweden is the only other European nation with similar coverage for 4 and 8Mbps services; both are available to 71% of households. These levels are well ahead of the UK where only 33% can access 4Mbps services and a mere 8% can access 8Mbps services. (Analysys Consulting Limited, Q1 2005)

 

 

 

 

The rate of growth in France however is still fairly strong at around 15% a quarter, and is currently in line with the average growth across Western Europe, which stood at 15.8% for Q4 2004.

 

With growth still strong and with take-up rates, currently 10.6% of the population, comfortably shy of those seen in Korea (24.9%) and the Netherlands (19%), saturation is still some way off for the French market. (OECD, 2004)

 

Despite having penetration rates that are only just above the OECD and Western European averages of 10.3% and 10.2% of the population respectively, France scores well in Ovum's broadband take-up index for G7 countries; taking 4^th place, one place ahead of the UK and only trailing Canada, Japan and the US. (Ovum, Q3 2004)

 

 

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There is currently very little fibre broadband (FTTx) in France, with no residential services available and only a few business services. This is about to change for businesses during 2005, with France Telecom promising an accelerated rollout of fibre lines to some 2,000 business and industrial parks across France, home to 120,000 businesses. The goal is to provide these businesses with near term capacity of up to 100Mbps, and even 1Gbps for companies located in France's 20 largest cities.A number of French Local Authorities are also building fibre networks, with 52 projects underway in 2005.

 

There have been some Fixed Wireless Access (FWA) trials conducted by France Telecom, but this technology is only expected to be used in rural areas where xDSL and cable broadband are unavailable.

 

 

 

 

 

Having been the early leader, cable broadband has continued to grow steadily while xDSL broadband has become the dominant technology in the market. Growth in cable broadband usage in the market is limited due to the fact that cable networks only pass around 8.8 million homes, or 35% of the population. At the end of Q1 2005, there were no other 'mass market' technologies in the French market.

 

The massive growth in xDSL broadband can be attributed to the aggressive pricing battles for market share between providers. However, France Telecom was accused of offering very low priced wholesale services during 2004 and thereforeseverelylimiting the margins available to LLU operators. This gave the LLU operators little pricing advantage over ISPs reselling the wholesale services. As a consequence there has been a continued downward pressure on the retail prices charged by both the ISPs and the LLU operators.

 

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Historically the French market has been uncompetitive due to the dominance of France Telecom, and a focus on xDSL rather than other technologies. Competition has increased through the large deployment of LLU in the country (1.6 million unbundled lines at the end of 2004, compared to 28,000 in the UK and 210,000 in Sweden) allowing the rise of smaller broadband operators such as Free, Neuf and Cegetel.

 

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Due to the advent of LLU and the variety of services that come with it, focus in the market has already begun to move towards higher bandwidth services that can support triple play strategies and delivery of VOD and TV over Broadband, which are increasingly available applications. Take-up of these services is likely to grow over the foreseeable future. Analysys Consulting Limited forecast that total broadband connections will almost double from the current 6.8 million to around 12.2 million in France by 2009.

 

 

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