Free's French Revolution: this time it's fibre

Oct 2, 2013

It's interesting how these big marketing blasts reach for the flag and national pride - revolution, freedom and all that (Today's Freedompop story has more than a whiff of that as well if I'm not mistaken).

Free says it's continuing on with its campaign to shake up the French telecoms market, this time with a speed hike for its fibre-optic broadband - up to 1 Gbit/s download and 200 Mbit/s upload at no extra cost for existing subscribers. As a result, it claims, Free's eligible Freebox Revolution subscribers will automatically have access to the fastest retail speeds in Europe.

Free clearly intends to differentiate itself through its technical decision to go point-to-point rather than GPON (gigabit passive optical network) with its fibre. It says this enables it to guarantee speeds to each subscriber - none of the obfuscating 'up to' speed numbers because access bandwidth is being shared, it claims. Each Free subscriber gets its own gig to play with.

Where Free is relying on copper unbundling it's also offering ADSL and VDSL upgrades to the fastest speeds available, all at no extra cost, depending on the length of the line. It claims it can cut subscribers over to the best speed because the Freebox supports multiple standards.

This approach is very interesting - not to say challenging to other providers. The impulse of most telcos is to charge more for a faster pipe so they can tier the market. But it's also clear that the cost of providing a faster broadband experience over the same length of copper line is marginal. And even if a speedier pipe results in users downloading more high bandwidth material (video for instance) the evidence is that heavier usage only increases Internet interconnection costs for the service provider very marginally too.

The cost, in other words, is nearly all in the line rental, not what you do with it and Free's offer essentially exploits this economic fact to make itself more attractive to subscribers without burdening Free with any major new costs.

But broadband challengers don't always get all the breaks. There are hefty advantages in being an incumbent too as AT&T has shown by doing a 'spoiler' on Google by bringing out an almost identical product right on the town (fancy that?) that Google has identified as its next 1 Gbit/s city after the Kansas Cities.

AT&T has announced that it will roll out a fibre network in Austin, Texas this year. Being AT&T it simply can. Google meanwhile, has scheduled its Austin Texas build to finish in mid 2014.

Is that predatory behaviour on the part of AT&T? Probably not. Will both networks go ahead or will Google pull the plug on its plans? Can both networks be profitable? We'll soon find out.

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