France launches 10-year, $27 billion fiber broadband initiative

France sees broadband as a major driver of economic growth, and on Friday the government revealed plans to dedicate €20 billion ($27 billion), using a mix of public and private funds, to the buildout of fiber-based broadband networks.

"High-speed broadband will strengthen the competitiveness of our companies and the quality of our public services," President Francois Hollande said on Wednesday in a speech outlining the plan, reported Reuters. "It is an opportunity to preserve and develop employment."

To fund this ambitious plan, Hollande said the government will dedicate three tranches of over €6 billion ($7.9 billion) each. These funds will come from three sources: service providers like France Telecom Orange (FTE.TI), a combination of service providers and local government, and state and local government entities.

Reuters reported that by the year 2017, which is the end of Hollande's first term, the buildout may reach 50 percent of the country.

Despite the potential of Hollande's plan, it will be interesting to see if it actually can come together. France's former president Nicolas Sarkozy developed a similar €4.5 billion ($5.92 billion) initiative that did not bear fruit because service providers would not dedicate funds outside of the country's largest cities.

Network construction cost is also a big hurdle. As seen in the United States, the country's incumbent telcos France Telecom Orange and Vivendi have only done limited rollouts of Fiber to the Premises (FTTP) due to equipment and construction costs.

That's not to say France Telecom Orange is against FTTP, though. Last February, the telco said it would spend €300 to €350 million ($394 million to $460 million) in an effort to fend off threats from competitive providers such as Iliad and Free. As part of that plan, France Telecom struck fiber sharing agreements with its three main competitors, Bouygues Telecom, Free and SFR.

For more:
- Reuters has this article

Related articles:
France Telecom Orange to increase fiber network spending in 2012
FTTH/B subscribership rose to 54 million by the middle of 2011
Week in research: Private line forecast at $43B; France likes its VoD
50 percent of broadband homes would purchase security, says Strategy Analytics