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Free Unveils FTTH, Better Profits

Iliad (Euronext: ILD-message board), which operates in the French triple play market under the brand Free , has unveiled its initial FTTH (fiber-to-the-home) services offering and reported improved profits and turnover for the first half of this year.

Iliad, France's third largest broadband provider after France Telecom SA (NYSE: FTE - message board) and Neuf Cegetel Group (Euronext: NEUF - message board), is offering its customers a 100-Mbit/s downstream and 50-Mbit/s upstream broadband service, with TV services and free fixed voice calls within France, for just ?29.99 ($40.90) per month -- the same price as its DSL-based triple play service. Iliad, which has an ambitious plan to offer FTTH services across France, plans to launch the service in mid-September, starting in two districts in Paris. (See Iliad Updates on FTTH, 3G, Iliad Buys Into French FTTH and Iliad Plans ?1B FTTH Build.)

That's an offer that has London-based Heavy Reading chief analyst Graham Finnie drooling. "I'll be on the Eurostar [train service between London and Paris] first thing tomorrow," he says, before adding that such a service isn't likely to become available in the U.K. "I anticipate we'll be getting a similar package to this in London in, err, let me think now, never?"

It's also an offer that lays down a challenge to Iliad's main French rivals, France Telecom and Neuf. The national incumbent, which had had nearly 6.6 million DSL subscribers a the end of June (a 49 percent market share), and Neuf Cegetel, which has more than 3 million DSL customers (nearly 23 percent market share), are also building out FTTH connections. (See FT Unveils NGN, FTTH Plans, FT Fleshes Out FTTH; Neuf Makes Acquisitions Count, and Neuf Launches 50-Mbit/s FTTx.)

France Telecom has priced its 100-Mbit/s FTTH service at ?44.90 ($61.21) per month, while Neuf launched its triple play service in Paris in April for just ?29.90 ($40.76) per month, though the maximum speed is 50-Mbit/s downstream and upstream.

At the end of June, Iliad had more than 2.6 million DSL customers, giving it a near 20 percent market share.

Revenues from those customers in the first six months of this year totaled ?574.1 million ($783 million), an increase of more than 30 percent from the same period a year earlier. (See Iliad Reports 1H07.)

Net income was ?78.9 million ($108 million), up nearly 35 percent from the first half of 2006, though that figure included a one-time gain of ?13.9 million ($19 million) from the sale of Iliad's phone card subsidiary Kertel. Without that gain, net income would have been ?65 million ($89 million), a year-on-year increase of 11 percent.
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