REGISTRATION DOCUMENT AND FINANCIAL REPORT - Iliad

6.2 PRINCIPAL MARKETS
6.2.1 Internet access
6. OVERVIEW OF THE GROUP’S BUSINESS
6.2 PRINCIPAL MARKETS
6.2.1.1 Determining factors in the growth of Internet usage in Western Europe
In Western Europe, following a period of very strong growth in the level of Internet usage, particularly as a result
of so-called “free” services followed by the introduction of fixed-rate inclusive packages, the prospects for
further growth now partly depend on the roll-out of broadband technologies. The market should continue to grow
during 2008, largely due to:
• the level of penetration of home computer use. The use of home computers is a key factor in the
development and expansion of the Internet access market. Western Europe has still not reached the same
level as the United States, which is a far more mature market, although the disparity is decreasing. There are
however still considerable differences in the level of home computer use within Western Europe itself;
• the use of new technologies offering both broadband Internet access (such as ADSL and cable) and the
widespread distribution of new types of content (such as TV, Video on Demand, network gaming, etc.);
• the growth and general improvement of local language content and e-commerce;
• increased liberalization and competition in the telecommunications sector;
• the commitment on the part of the authorities towards promoting ever-wider usage of the Internet.
The broadband market: a powerful vector for growth
With 14.8 million residential ADSL lines in December 2007 16 France is one of the frontrunners among European
countries in terms of both the number of ADSL lines and market penetration. Countries with a high rate of
Internet penetration continue to attract new users, but from now on the main driver for growth in this market will
be the migration of subscribers to broadband connection technologies.
Choice of broadband technology
In Western Europe, ADSL appears to have become the technology of choice, accounting for 85% of broadband
subscribers.
In France, 3 million people subscribed to broadband in the past year (up 25.6%), thanks mainly to wider access to
ADSL technologies (14.1 million xDSL connections in the third quarter of 2007). Revenue from broadband
services totaled €1 billion in the three months to September 30, 2007, up 32.4% year-on-year.
Broadband penetration rate in Europe: still a large untapped potential in France
The number of DSL and cable modem connections in Europe continued to increase in 2007. Northern European
countries are generally ahead of other European countries in terms of penetration of broadband technologies,
particularly due to the early deregulation of the telecommunications sector – such as in Sweden which was
deregulated in 1993 – and a high level of commitment on the part of the public authorities.
6.2.1.2 A thriving broadband market in France
At December 31, 2007, France had a household broadband penetration rate of 31%. At January 1, 2008, France
Télécom had delivered 2,956 sites to unbundling operators, representing a population coverage of 68%. All
France’s overseas dependencies have at least one unbundled site. There is likely to be accelerated growth in
France in terms of the number of households with broadband access, which means that prospects are healthy for
the Group in light of its positioning in this sector.
16 Source: ARCEP
Iliad – Registration Document 2007 - 39