Market Watch

SFR Intensifying Fibre Roll-Out



The largest independent broadband provider in France, SFR, has expanded its fibre-to-the-home (FTTH) footprint to densely populated areas, launching its 100Mbit/s product in Lyon, Villeurbanne and Marseille in June 2010. In total, the operator has passed 0.3m homes with fibre and plans further deployments to areas including Nice, Grenoble and Paris suburbs by 2011.

In the most densely populated areas, SFR is pursuing a network-sharing strategy and has invited other providers to co-invest in connecting a potential 3.8m homes in 42 municipalities. In more sparsely inhabited parts, SFR has co-opted incumbent telco France Telecom and independent operator Free; a joint venture by these three players is underway in the town of Bondy, with a FTTH launch expected by early 2011.

Analysis
In Q4 2009 SFR became the largest alternative ISP in France, with a total retail broadband subscriber (DSL and FTTH) of over 4.5m, overtaking rival Free. SFR now claims a 23% retail broadband market share.

Strong competition in the market and the aggressive pricing policies of SFR, Free and the other leading broadband players in the market have helped erode the incumbent's market share. France Telecom claimed a 45.1% slice of the retail broadband market in Q4 2009, down 1.7% from Q4 2008 - this share has been in decline for six consecutive quarters.

Undercutting competitors, SFR currently markets 100Mbit/s broadband bundled with a fixed phone and TV product for €19.90 per month. A comparable 100Mbit/s triple play product costs €29.99 per month from Free, €31.90 from Numericable and €44.90 per month from FT.

Following clarification of network sharing FTTH regulation by Arcep, in addition to SFR, France Telecom signalled it is resuming investment in FTTH with €2bn until 2015, while Free's objective is to pass 4m homes by 2012.

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