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50 Mbps for $40, but in France

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Neuf Cegetel, the French competitive telecom carrier has just started selling a 50 megabits per second fiber-to-the-home connection that costs about 30 Euros (about $40) a month. In comparison, 50 Mbps costs a while lot of money in the US. Verizon, Surewest and Cablevision are three companies currently offering 50 megs at a wallet-ripping price. For $40 you get somewhere between 3-to-6 Mbps (voice and television not included) from most carriers in the US.

Neuf’s service is currently available in select parts of Paris & Pau (a town in the very south of France) and also includes VoIP and HD & Regular TV over IP services. The company is also in talks to buy the Club Internet broadband business from Deutsche Telekom. It it adds 600,000 Club Internet customers, then Neuf will become the #2 broadband provider in France, behind Orange, which has 4.2 million subscribers.

11 Responses to “50 Mbps for $40, but in France”

  1. makes money yes, but they have another VATlevel than the other bbproviders in France. This is due to they are providing tv as well and then they can apply a “cultural VAT” on their services instead of the standard VAT which is applicable for the other providers. That is maybe why the others are 20% more expensive?

  2. Last year, ING Bank published an analysis of the Amsterdam FTTH project (Citynet), its impact on Dutch telco incumbent KPN and summaries of FTTH rollouts in Europe and the US. The report concludes that “GNA (the entity laying the fiber) is viable with a 40% subscriber take-up and while generating monthly wholesale revenue of €25 per connection, assuming that the fibre investment has a 30-year life span. We note that press reports have stated that CityNet expects to see subscriber take-up of around 50% with each customer spending around €50 per month, implying a monthly gross contribution of €25 per customer for BBned and the service providers. We conclude that GNA and the overall CityNet project can succeed, although there are start-up risks.”

    Go to the link below and download the full report:

  3. Just a few words of clarification: the Pau offer is out, the Paris offer (under the Neuf brand) is not. That’s the announced price and bandwidth though.

    Most DSL in France is ADSL 2+ so we’re talking about trebling bandwidth for the average customer, not multiplying by ten either.

    Can anyone make significant money on that kind of revenue ? I have my doubts. I’ll have to study that more closely but a model released last year mentioned a 5 year breakeven on fiber with a 45 EUR/month ARPU and customer connection costs around 8-900 EUR.

    That implies that French operators need to do 15 EUR of extra ARPU besides the subscribtion fee, keeping in mind the basic service already includes free telephony to many destinations and about 50-60 free TV channels.

    It’s gonna be a tough market…

  4. The last mile access is the bottleneck when it comes to leech torrent-files with a lot of seeders so 100Mbs is not a theoretical maxima in those cases. And besides, who needs 100Mbs for browsing the internet, it is only needed for sending huge files up or downlink.

  5. They are not losing a lot of money.

    Their biggest competitor ( make profit with a similar national offer (landline, ADSL 2+ 28Mbps max, unlimited calls to 49 country, HDTV, and a few other services like wifi VoIP using others customer’s dsl box) for 30 euros.
    Orange also make profit (they cost about 20% more).
    Neuf buy all other isp so they don’t win money yet.

    The 2 other big ISP also have their own fiber offer (free will have in 3 month). But for the moment it’s the beginning, just for a few streets. it will take 2 years to cover Paris.

    Yohay : which ISP ? i though max in israel was 3Mbps (with netvision), but this may had evolve.

  6. 50Mbps FTTH sounds great, until you realise that last mile access is not the bottleneck in a well populated broadband network, and the the advertised speeds are just theoretical maxima in any case.

    Come to Tokyo to see for yourself, “100Mbps FTTH” for as little as $30/mth, but you’ll be lucky to get real-world throughput of 30Mbps in the dead of the night to any server which isn’t located at the other end of the fiber, ie at your local exchange (and most servers aren’t).

    You’ll also find that the speed is nowhere near symmetric either.

  7. It is not easy to earn money on those price levels. I think there is only one or two which can do that on those price levels so the rest is probably just trying to be acquired or don’t know how much money they are losing until the end of the year.

  8. El Sueco

    Try Sweden instead, sitting on 100Mbps for about $40/month. I guess there is a reason that Pirat Bay is so popular here (except for that fact that the site is Swedish of course, details ;).