France launches 20 bln euro fibre broadband rollout

PARIS Wed Feb 20, 2013 5:47pm GMT

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PARIS Feb 20 (Reuters) - France will pledge nearly 20 billion euros ($27 billion) Of public and private funds over the next decade to speed up construction of high-speed fibre broadband networks and spur economic growth.

Telecom operators such as France Telecom and Vivendi have been slow to invest in such projects because of the cost.

"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. "It is an opportunity to preserve and develop employment."

High unemployment and belt-tightening from companies and consumers have brought the French economy to a standstill.

Hollande has said growth this year will fall short of his government's 0.8 percent target, pushing deficit-cutting goals further out of reach.

Three tranches of more than 6 billion euros each will fund the planned network rollout, Hollande said. One will come from network operators, one from a mix of operators and local government and the last from state and local-government money.

Local governments' outlay will be funded using tax-free, regulated deposits gathered by state bank Caisse des Depots.

By 2017, the end of President Hollande's first term, 50 percent of the country will be covered under the plan.

Hollande's predecessor Nicolas Sarkozy announced a similar plan, worth 4.5 billion euros, as part of a post-crisis stimulus package. But operators' reluctance to invest outside big cities meant it never got off the ground.

The new plan offers a different route by allowing operators to share rollout costs in less profitable areas. ($1 = 0.7487 euro) (Additional reporting by Julien Ponthus and Leila Abboud; Editing by Helen Massy-Beresford)