REGISTRATION DOCUMENT AND FINANCIAL REPORT - Iliad

6. OVERVIEW OF THE GROUP’S BUSINESS
6.1 PRINCIPAL ACTIVITIES
In November 2002, Free’s teams began installing Freebox DSLAMs in France Télécom sites, either in facilities
designed for use by several alternative operators or in dedicated rooms.
Map showing the Group’s national network at December 31, 2007
Source: Iliad
Until March 2003, the Group’s national network was based mainly on contracts for the provision of capacity
(bandwidth), whereby the monthly cost was proportional to the level of the transmission capacity used, or data
transported, on the network. In order to offer the maximum bandwidth to its subscribers on unbundled lines, the
Group decided to migrate its national network from contracts for the use of bandwidth capacity to contracts for
the provision of dark optical fibers directly operated by the Group.
This migration resulted in a shift in the Group’s cost structure from variable costs to fixed costs which did not
depend on the bandwidth used. This optical fiber pair is operated by Free primarily through the use of Huawei
wavelength multiplexing equipment (DWDM) and provides Free with flexibility for significant growth in the
number of broadband customers throughout France without any currently foreseeable restrictions in the amount
of available bandwidth.
During 2007, the Group extended its network, connecting to and installing Freebox DSLAMs in new France
Télécom exchanges in order to be able to provide all broadband customers within the area of coverage of these
France Télécom sites with access to the benefits of Free’s unbundled service offering.
Although at December, 31, 2007, Free maintained its interconnections at all 18 MSUs in mainland France and at
420 LXs (including all those located within the Paris city limits), it also enjoyed autonomy on a national level as
a result of IRU agreements for the provision of an optical fiber pair which it operates for its own account.
28 - Iliad – Registration Document 2007