France Telecom CEO: Smartphone Data Usage Could Cause Network Collapses

May 27, 2011


I've been reading a interesting interview between CNET on-line and Stephane Richard, the CEO of France Telecom, much of which is pertinent to content providers that use the Internet for distribution. France Telecom is second only to AT&T with respect to the number of iPhones in use on its network, and under its Orange brand, sells the iPhone in 15 other countries. Regarding the use of France Telecom's infrastructure to distribute content, Richard was quoted thus:

"The real risk of everything is collapse. Nobody utters this loudly enough, but the real issue for the world is a collapse of the network or some local collapses.

"We [France Telecom] are the people with pipes. We are supposed to invest heavily in pipes in order to bring the capacity which is necessary to sustain the explosion of consumption and usage and data traffic in our networks. At the same time, the people that create this traffic...are not really incentivized to manage properly, globally, the traffic.

"There is an unbalance in the overall system, which in our view is a major problem.

"It is totally impossible to absorb such an explosion in traffic without first, clearly investing massively in spectrum and equipment, and second, without introducing some new pricing approaches."

The CNET article itself references an article in Bloomberg online from last fall in which France Telecom, Telecom Italia and Vodafone Group were quoted as wanting to put in place deals that "require content providers like Apple and Google to pay fees linked to usage." From the Bloomberg article: "Service providers are flooding networks with no incentive" to cut costs, France Telecom Chief Executive Officer Stephane Richard said last month. "It's necessary to put in place a system of payments by service providers as a function of their use."



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