Late last week, French regulator ARCEP published the latest numbers for French FTTH. They’re not looking particularly sexy in terms of acquisition. Not that this comes as a surprise, considering how little marketing and sales action has been happening. However, this article in PC Impact entitled FTTH: Les Concurrents d’Orange Ne Recrutent Presque Pas d’Abonnés (FTTH: Orange’s Competitors Recruit Virtually No Subscribers) highlights a new trend which was anticipated but not yet seem, namely that only Orange, the incumbent, is actually trying to sell the technology. The summary table put together by PC Impact does not leave room for misinterpretation:
During the earlier parts of the year, Orange’s sales represented about half of the (very low) total sales of FTTH in France, which you would expect of a player whose market share in broadband is roughly 50%. But in the last recorded quarter (Q3), Orange’s sales have shot up while their competitors’ (essentially Free and SFR, Numéricable’s FTTLA offering is tracked separately) have dwindled to nothing.
This isn’t all that surprising for two reasons: unti now, none of the three operators deploying FTTH (or theoretically deploying FTTH) were actively marketing or selling. So each was carried by the momentum of their own brand, and roughly accrued subscribers equal to their broadband market share. In Q3 Orange started to market and actively sell through door to door salespeople. As a consequence, they accrued a larger share than what their brand alone carriers.
However, the overall number of new subscribers haven’t gone up, which suggests that there is either a natural cap due to the addressable market (it has long been known that the very large numbers of homes reported as open for service by ARCEP, over 2 million at the end of Q3, don’t mean these customers can actually be connected but simply that the building they live in has fiber in the basement) or that Orange’s marketing and sales are not really effective to carry over people who are not already interested in getting FTTH from any provider. Unsurprisingly, there’s no Field of Dreams effect.
If you want them to come, you have to entice them…
This also means that Free and SFR are sitting idle, having never really embraced FTTH even though Free’s own announcements was at the origin of the whole dynamic for FTTH deployment. Ironically, Free is now advocating for a balanced deployment of FTTH and VDSL (although they were influential in making VDSL persona non grata in the French regulatory landscape 5 years ago) and in this aligned with Orange.
It’s quite clear that Orange’s competitors have dipped their toes in the infrastructure waters and decided it was too cold for their taste. They will now likely wait for Orange to meet its deployment obligations before marketing services that will use Orange’s infrastructures to reach end-customers, just like they have always done. Meanwhile, both Free and SFR have pulled out of TV content curation in favour of French Pay TV giant Canal Plus (see this for SFR’s announcement today)? Please note that this isn’t exactly comparable to Fastweb’s more radical IPTV announcement a few months back. Fastweb pulled out of TV distribution altogether. Free and SFR are happy to distribute Canal Plus’ offers and a basic linear TV package of their own (with some replay features) but have pulled out of VoD completely and no longer offer repackaged TV offers of their own.