France Telecom threatens to pull the plug on FTTH investment
The first interpretation of this move is that FT is bluffing in order to pull ARCEP's arm into changing its position. Unlikely to happen as ARCEP has already stated (according to the same article) that this is bluff.
The second interpretation is that FT really believes this will cost them more. It's hard to fathom how because even assuming that, as Didier Lombard has stated, the cost of multi-fiber is 40% above the cost of mono-fiber (for what it's worth, ARCEP estimates that same cost at +5%), the investment will be shared by the co-deployers. Hence the overall cost to FT for a multi-fiber with two players would be -30% and for three players it would be -53%.
I can't really think of a third interpretation. Someone suggested to me that FT might have decided that they would pull out of the wired infrastructure business altogether and be the one who uses the competitor's infrastructure to serve customers, but I don't believe that for a minute. First because it would be a radical change in worldview for a company who has always believed that owning the network asset was a crucial strategic advantage, and second because there currently is no provision in regulation to access the fiber infrastructure anywhere except at the foot of the building (ie. no unbundling and no bitstream...)
What is certain is that this is good news for SFR and Free no matter what. If this is bluff, we will probably know very fast. If it isn't, it's momentous and analysts all around the world are going to be quizzing Orange about it...
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