UPC Launches Cable Internet Access in France

The Dutch broadband network company United Pan-Europe Communication (UPC), has launched a high-speed cable Internet access service
in France that could eventually pose a challenge to the French leader in
cable access, Cybercable.

UPC, part of Denver-based UnitedGlobalCom group,
also announced two acquisitions that dramatically extended its French
network and solidified its position as Europe’s largest private cable
operator.

Chello Broadband France, a UPC subsidiary, is now offering
unlimited Internet connections for a monthly FF239 (US$ 39) subscription,
said its chief, Guy Boselli.

The subscription includes use of a Terayon cable modem, 10 MB for a personal
homepage, and three email addresses. A one-time FF600 (US$95) fee pays for an
onsite technician to install and configure equipment and communications
software on the subscriber’s computer, Boselli said.

The deal, which includes toll-free telephone help, makes Chello a far
cheaper access option for heavy Internet users than is France Telcom’s
expensive local telephone network.

It also undercuts Cybercable, which charges similar prices for setup and
subscriptions, but requires either buying a cable modem for FF2,690 (US$425)or
renting one for FF79 (US$12) a month, with a FF500 (US$79) deposit. Cybercable also charges
FF3 for every uploaded megabyte exceeding 125 MB in a month. Chello Broadband
offers unlimited uploads and downloads, Boselli said.

For now, Chello Broadband’s offer is only available in about a dozen towns
in the Seine-and-Marne department, east of Paris. The company expects to
have 5-6,000 Internet users by year’s end, when it expands into the Paris
suburb of Montreuil, Boselli said.

Cybercable’s dominance is apparently safe for now, even with its widely
reported technical problems. A subsidiary of Lyonnaise Cable, its control of cable access within Paris and other
major cities gives it about 27,000 subscribers.

But Cybercable’s breathing room could shrink soon.

Earlier in June, Médiaréseaux, another UPC subsidiary,
became France’s fourth-largest cable operator, by purchasing the companies
Vidéopole and Réseaux Câblés de France for an estimated total of $695
million. In April, Médiaréseaux purchased Time Warner Cable France, which
operates in Limoges and the Paris and Lyon suburbs.

Médiaréseaux now has 1.4 million cable hookups in France, which it plans to
market for cable-based television and telephone service. Chello Broadband
will offer Internet access over the same hookups, after making technical
adjustments to the acquired infrastructure, Boselli said.

If that’s not enough to make Cybercable nervous, Médiaréseaux, as well as
some other companies, has expressed interest in buying the network
infrastructure Cybercable rents from France Telecom
for its service in Paris.

UPC’s Chello Broadband subsidiaries now have a modest 42,000 Internet cable
subscribers throughout Europe — mainly in Holland, Austria, Belgium and
Norway.

However, pointing to its estimated 6 million broadband cable hookups in
Europe and its ambitions to acquire more, analysts here say UPC, in which
Microsoft holds a 7.8 percent stake, is a serious contender to become the European
leader in high-speed Internet access.

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