DSL Prime: Greece, Paris, Tokyo

Incremental progress in Greece, as regulators in Paris and Tokyo make broadband services there the leaders of the world.

by Dave Burstein of DSL Prime and Future of TV [September 13, 2006]

Greece at last
Orders 200,000 lines from Huawei
The new agora of the internet runs very slowly in Greece, but OTE added 59,000 DSL subs in the March quarter. That's still only 213,000 lines of DSL, keeping Greece (with Ireland) at the bottom of any list of developed countries. OTE's capital spending was minimal, 9.5 percent of revenues in 2005, while dialup users propped up corporate finances paying by the minute. With no Greek cable modems, only 7,000 unbundled broadband lines, and an obviously ineffective regulator, the company was instead investing in Romania, Albania, and Bulgaria.

Merrill notes that Greek DSL reaches only "6 percent compared to a European average of 37.5 percent of households," although their optimistic estimate is "1.7 mn subscribers by 2010 for a penetration of 42 percent." Prices have dropped to 43 euro (including VAT) for 1 Mbps down and 21 euro for 384 Kbps/128 Kbps, the most popular speed. OTE projects prices dropping 15 percent per year through 2008.

Wang Jiading, Huawei's regional vice-president, has been busy lately, signing contracts from Greece to the UAE to the Maldives. The company's willingness to invest long term in the medium and small markets are making them the vendor of choice in many countries. In markets like Britain, Huawei has to price extraordinarily low, and probably below cost, to win contracts; in others, they are becoming the lead vendor and winning on service more than pricing.

Paris and Tokyo Lead the World
Xavier, please move to New York
Matthias Kurth, chief German regulator, came to a Columbia University seminar two years ago and was asked by a rude journalist why prices in Germany were more than twice as high as in France? He made me back up that question with facts, but it was undeniable. It obviously coincidence, but Germany has remarkably changed since that time. Competitive carriers have now dropped their triple play prices to about 40 or 45 euros and DT now is proposing 50 euro. Germany is now only a third more expensive than France, while a third less expensive than the United States.

Xavier Niel at Iliad/Free drives the French market. He's entitled to brag about what he offers his two million customers. "In France, all the ISPs have a 29.99 Euros price, and all the CPE have the word "box" in their name, crazy now ? ;-)."

Wish I could get a Freebox. 100 percent of ISPs have a triple play offer at this price (including AOL), including phone line, national calls, and 100 TV channels. With the Freebox, for 29.99 euro you get:

• WiFi MIMO
• ADSL2+ up to 28 Mbit/s (Nitro mode from Broadcom)
• "Tivo" PVR, timeshifting, .... (yes, the price includes a hard disk)
• Multi TV function
• Mediacenter
• International calls included to over twenty countries.

France has advantages. Call termination is cheap, television channels are mostly ad-supported, and loop lengths are short. Most customers get closer to 10 than 28 Mbps. It's still a remarkable achievement. If your country has far higher prices, that's darn good evidence your market isn't what it could be.

Masayoshi Son delivers similar at Yahoo BB in Tokyo, but has long been struggling for a real profit. They inspired NTT to install three million lines of 100 Mbps fiber, possibly France Telecom's strategy to compete.

Copyright 2006 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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