Free launches FTTH rollout in Paris, pledges free television, telephone, and low-speed Internet access

SEPTEMBER 11, 2006 -- French alternative broadband provider Free, subsidiary of the Illiad Group, today announced a fiber-to-the-home (FTTH) rollout that will provide each household within a specific geographic area with a dedicated optical fiber link for multimedia applications.

This optical fiber project is Free's contribution to achieving the public authorities' declared aim of positioning France at the leading edge of information technology, say company representatives. Moreover, it is fully in line with the Paris city council's goal of fostering the development of very high speed Internet access in the French capital. The decision by the Paris Municipal Council on 10 July 2006 to authorize the deployment of several thousand kilometers of optical fiber cables under a public property occupation agreement has enabled Free to sign up to the " Paris - Digital City" project.

As of the first half 2007, the group plans to offer its Parisian subscriber base access to its optical fiber network before progressively rolling the service out to certain towns in the suburbs and selected neighborhoods in provincial cities.

This deployment will require an investment of € 1 billion through 2012. Project funding will be covered by the group's cash position and free cash flows generated by existing business.

Over 10 million French customers, representing more than 4 million connection points, will be eligible by 2012.

Free plans to target those areas where the density of existing Freebox users is the highest: over 15% penetration on the fixed line market in these areas (and not on the broadband market). Free will automatically migrate Freebox subscribers to its Freebox Optical offering as a priority and at no extra cost. Freebox HD's ADSL 2+ terminal will be replaced by a Freebox Optical box. The Freebox HD TV terminal will remain compatible with this offering.

For € 29.99/month, subscribers will have access to optical fibre links via a fixed subscription including:
• 50-Mbit/sec high-speed Internet access;
• Unlimited phone calls to fixed lines in France and to some international destinations;
• An HD TV offering; and
• Provision of the Freebox Optical terminal.

In a bid to serve the interest of consumers, Free says it also will open up its FTTH network to other operators. Once the network is up and running, Free will hold talks with all interested operators with a view to offering them FTTH leasing agreements. The leasing price will enable operators to replicate Free's commercial offerings.

In a related announcement, Free has announced that it is offering free access to as many people as possible via the Free Foundation.

On receipt of a deposit, the Free Foundation will provide an optical terminal providing free access to:
• A telephone line without telephone subscription, emergency calls, and calls to social services;
• Low-speed Internet access (e-mail + web access); and
• Antenna service with access to free TNT channels in digital quality.

This means that in areas where Free has deployed its optical fiber network in France, (beginning in Paris), customers will be able to enjoy free access to television in digital quality, low-speed Internet, and a telephone line.

Households will no longer have to take out a telephone subscription and nor will apartment buildings have to pay for an antenna service.

With this no-charge offering, Free says it is taking a major step forward in developing the information society with the support of the Free Foundation.

The Free Foundation will be headed up by Jean Claude Michot, who, after starting out in research at Matracom, went on to found and manage France Teaser from 1989 to 2000, before joining Firstream and then the web hosting company Gandi.

Xavier Niel has undertaken to finance the Foundation from his own funds.

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