SNCF Réseau's new subsidiary, Terralpha, has arrived to market the bandwidth offered by the more than 20,000 km of fibre that snake through mainland France under the train tracks. As the fibres are pulled from town to town, they do not suffer from the slowdowns caused by the connections that operators put on each branch line.

In addition, this fibre network provides a national alternative to the network of the four major operators. The 2,000 alternative operators will now be able to interconnect a head office in Lille with its branch in Marseille, without having to wait for weeks for authorisation, without having to pay the high price imposed by their national competitor. And, above all, with better latency.

These more than 20,000 kilometres of fibre were already available for hire. But it was a case-by-case process: Since SNCF Réseau only provides 100 Gbit/s links, it was up to its customer to install a router at each end to carry its traffic. And apart from the major operators, no one knew how to install a router on these fibres.

To connect, Terralpha chose to partner with the Telehouse chain of colocation data centres. "Our strategy is to be present in the telecom marketplaces. That is to say, in the rooms reserved for the interconnections of operators in the data centres. The most important ones are on the TH2 campus of Telehouse in Paris, which brings together 300 telecom operators," argues Gabriel Chenevoy, Terralpha's CEO.

Especially since TH2 has a state-of-the-art computer system that monitors the 50,000 fibres running through its operator rooms one by one. The curvature and path of each fibre would be carefully studied.

Apart from Orange and SFR, Bouygues Telecom and Iliad are also starting to sell bandwidth on their national networks to alternative operators. Kosc was previously the only independent infrastructure operator through which local providers could offer national connectivity to their customers. It is therefore the one that Terralpha is now competing with. After financial setbacks, Kosc was finally bought out a year ago by Altitude Infrastructure, an ex-alternative operator that has refocused its activity on fibre installation.

Although Altitude Infrastructure enjoys a good image with local authorities, its challenge remains to link together fibre segments scattered over the territory. This is where Terralpha claims to have a head start.

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Source : Le Mag IT

The wholesale operator, which took control of Kosc in the summer of 2020, is now preparing to relaunch it. And Kosc's rebound is bound to be closely scrutinised by the various players in the sector.

David El Fassy, the CEO of Altitude Infrastructure - now renamed Altitude Infra, explains, "For us, the acquisition of Kosc is an unprecedented opportunity to expand our client base in areas other than those where we have traditionally operated, particularly in AMII or urban areas. [...] After beating Kosc's order record in September, we now wish to enrich its catalogue of addressable FttE and FttO products, on which Kosc has not had a strong presence until now". Other objectives include the development of Kosc's coverage in SFR's AMII zones, with the eventual ambition to push for full unbundling of the wholesale operator.

Altitude Infra wants to make Kosc's API the most complete aggregator of telecommunications infrastructures, both for its major accounts (such as OVH) and also for VSEs. Indeed, the latter constitute the most important economic development basin of the corporate telecoms market.

To achieve this, the wholesale operator is planning a massive investment of 100 million euros over five years in Kosc. Xavier Grossetete, who has been working for Jaguar Network since 2017, has been appointed sales director and will be responsible for boosting the recruitment of new customers.

"With Kosc, we are becoming the operators' one-stop shop, with coverage throughout the country," says David El Fassy, confirming his intention "to invest and have a long-term influence on the fibre optics market, but also to develop new offers and services for companies". The plan proposed by Altitude Infra should enable Kosc to return to a positive Ebitda, as well as a turnover of between 80 and 100 million euros in 2022.

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Source : ZDNet

The alternative operator has just announced that it has raised more than €500 million in equity and junior debt from a pension fund to ensure the deployment of a fibre optic network and the recovery of Kosc.

Subject to approval by the regulatory and competition authorities, these two transactions are expected to be finalised in the fourth quarter of 2020. "These two transactions demonstrate our ambition in the fibre market in France and beyond. In a context of sector consolidation, these investments will enable us to pursue our growth strategy with the aim of strengthening our position as the leading independent operator", said David Elfassy, President of Altitude Infrastructures.

The takeover of Kosc should now enable Altitude Infrastructure to develop its addressable customer base in very dense and moderately dense areas, where the bulk of the Wholesale-only operator's business is located, which claims around ten million eligible outlets in these areas.

The alternative infrastructure operator is also planning a massive investment of 100 million euros over five years in Kosc. With this new fund raising, this welcome injection of capital now has all the green lights. As a reminder, the plan proposed by Altitude Infrastructure would enable Kosc to aim for a return to a positive Ebitda and a turnover of between 80 and 100 million euros in 2022.

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Source : ZDNet

The prospect of going out of business is slipping away for Kosc. "A business continuity plan will be proposed by Kosc's management and massively supported by Altitude Infrastructure," explains David El Fassy, the president of this group specialising in the deployment of fibre optics in rural areas.

The offer will be placed on Monday on the desk of the receiver, who will have to choose between it and possible disposal plans presented by other candidates, such as Bouygues Telecom, which has long been presented as a potential buyer.

"We propose to maintain the business and the services provided to customers. We are backed by Altitude, an extremely experienced family group used to providing wholesale only services. And we pay the company's liabilities. This is by far the best solution," argues Yann de Prince, Kosc's founding president.

As part of the continuation plan, the debts of 40 million euros would be renegotiated. And an agreement would be sought with SFR to settle any dispute.

The fact remains that the company is burning cash. The former shareholders - the OVH group and Caisse des Dépôts - had agreed to provide 4 million euros at the beginning of December to ensure operations during the recovery phase. The administrator knows that this cash box will soon be empty.

Faced with this cash flow problem, Altitude Infrastructure promises to invest 100 million euros in Kosc over the next five years. A large part of this contribution will be made out of own funds.  "Acquiring new customers is expensive, explains David El Fassy. Kosc's technical infrastructure is now efficient and supplies a lot of companies. Kosc's market is ahead of him. Our business plan foresees a return to operational equilibrium in 2022."

The existence of this continuation plan should reassure Kosc's employees, the dozens of customer operators, the companies that they themselves supply, and also the elected representatives of the Senate and the Assembly, who have taken up the challenge in recent months to criticise the Competition Authority's action on the corporate telecoms market. Indeed, faced with the very unsatisfactory access of SMEs to optical fibre and high prices, in a context of Orange and to a lesser extent SFR domination, the parliamentarians called for the rescue of the Kosc model. The rescue is on its way.

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Source : Les Echos

From the second half of the year, the railway group will sell fibre to regional telecom operators for business customers.

On this market dominated by Orange and SFR, the arrival of SNCF should therefore make waves. The company has historically had a 20,000-kilometre fibre network that connects its 3,000 stations in particular. For years, SNCF has already been leasing access to its network to regional telecom operators too modest to build such infrastructures themselves. However, this is very long-distance "dark" fibre. The operators have to install their own equipment to bring it into service. This time, SNCF's ambition is to sell "activated" fibre, i.e. ready to use.

The group assures that it does not want to "disrupt" the market, but simply to contribute to the digital development of the region. The Very High Speed Broadband plan should generalise fibre throughout France by 2022, but today only 23% of VSE-SMEs are connected to it, according to a Covage study.

The SNCF wants to propose a premium offer with the aim of achieving profitability. "The SNCF is going to enter this market with State aid. So this project is not going to be very well received by the major operators. It's a very political issue," says one observer.

There is nothing trivial about the timing of this project. Kosc, a wholesale operator created in 2016 to shake up the Orange-SFR duopoly in corporate telecoms and which leased its fibre network to 65,000 customers, has only six months to find a buyer. In this context, small operators worried about being cut off from the Kosc network could turn... to the SNCF.

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Source : Les Echos

Kosc Telecom was the solution devised by the public authorities to bring more competition to the business telecoms market. Just three years after its launch, Kosc is expected to file for bankruptcy leaving a slate of 120 million euros.

After the merger with SFR, Kosc acquired part of the activities of Numericable (Completel). Bpifrance had injected 9 million euros and OVH was also a shareholder via a contribution "in industry". The idea was to make Kosc the third man in the lucrative telecom business market, 85% owned by Orange and SFR.

In 2018, Caisse des Dépôts et Consignation had in turn promised to provide 20 million euros to Kosc. It was without counting on a grain of sand: a lawsuit lost to SFR and the threat of having to pay it 20 million euros. For the Caisse, the risk was too high and decided to withdraw from the case, leading to the fall of the telecom operator.

A new game should be played at the helm of the commercial court, with potential buyers. Indeed, the telecoms sector has evolved since 2016 and Free and Bouygues Telecom have in turn launched themselves into the business market. Bouygues' subsidiary would also be a serious candidate for the takeover of Kosc, and would therefore be favoured by OVH.

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Source : Le Figaro

The wholesale-only operator Kosc is in the spotlight. Its president, Yann de Prince, confirmed that there are only a few weeks left to find a solution to his financial problems at his hearing in early October by the Senate.

"As the company had not yet reached operating balance, and could not therefore in principle convince the court of its ability to continue its activity, it was logical that we should proceed, not with a suspension of payment, but with outright liquidation," explained the director of the alternative wholesale operator.

"The process I have initiated gives the company a very short period of time, two months, to try to overcome its difficulties," he said. Yann de Prince mandated the Rothschild investment bank in early September to "find investors or any partner who could help save or take over the company".

"The outcome of the process initiated at the beginning of September is set for the end of October 2019. It may be extended for a further two months. Its main condition is the payment of the next salaries. This payment itself depends on a new commitment by shareholders or the lifting of SFR's seizures. If one or the other does not come true, we will probably no longer avoid the pitfall of liquidation," said Kosc's boss.

Facing serious cash flow problems, the operator has indeed seen its horizon darken considerably in recent weeks. The operator is uncertain following the Competition Authority's unfavourable decision concerning the takeover of Completel's DSL network, previously held by SFR, and the withdrawal of one of its major investors, Banque des territoires.

"Kosc is in a blocking situation at this time. On September 27, 2019, using the ADLC's decision as an instrument in the middle of a discussion process with creditors, SFR proceeded to a protective seizure of the company's accounts and all trade receivables. As a result, Kosc no longer has any liquidity. Bailiffs regularly come to our offices. From the end of October, it will face the problem of salary payments unless our shareholders intervene further," said Kosc's Director of Financial Control and Regulatory Affairs.

It is now time for an emergency. "Kosc's situation is now simple: either in the coming weeks, the shareholders will be sufficiently convinced and will decide to provide sufficient funds to allow the company to regain a certain margin of manoeuvre, necessary for the implementation of a sustainable solution, or the company will be liquidated or sold," explained its president.

Especially since OVH, one of its historical investors, could well play the role of the girl of the air since the telecom activities are no longer a priority for him.
But the operator has no shortage of contenders for its takeover. The operator's president thus stated "Despite a most unfavourable situation, despite the urgency with which these possible partners are asked to position themselves, sixteen[candidates] have already expressed themselves" by specifying that they are mainly industrial partners.

Bouygues Telecom and Iliad could be candidates for this takeover. This information should still be taken on a conditional basis, but it might seem plausible when both operators have views on this lucrative market.

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Source : ZDNet

Kosc was unsuccessful against Altice and contested the decision taken by the Competition Authority. Indeed, seized on the occasion of the sale of Completel's copper network, the competition police last week issued its verdict: "there is nothing to define that Altice has committed a fault with regard to its obligations".

This is a major blow for the wholesale provider of telecom services to operators in the enterprise market, which has been denouncing SFR's parent company's late deliveries for months. This decision is all the more difficult to accept as its financial equation has become significantly more complicated.

But the operator does not intend to stop there since he "rejects", in a press release, the verdict of the Competition Authority and announces that he will bring the case before the Conseil d'État. A referral "motivated by the numerous irregularities that have marked the follow-up of the case by the Competition Authority, including the unexplained duration of its investigation in a context of urgency and the probable violation of its secrecy".

In addition, the company believes that the abandonment of Banque des Territoires (Caisse des Dépôts group), one of its main supporters, can only be explained by an understanding of the result favourable to Altice - SFR upstream.

Kosc warns against a prospect of consolidation that it now considers itself the "privileged target of a hostile acquisition" in view of its financial fragility. An operation that would "de facto close the business telecommunications market to the detriment not only of the ecosystem of hundreds of digital business service operators but also of the beginning of catching up on the digitalisation backlog of French SMEs and VSEs", warns the operator.

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Source : DegroupNews

After many technical and legal setbacks last year, the horizon is finally clear for Kosc. In mid-June, Banque des territoires (Caisse des Dépôts) invested 20 million euros in the capital of a new subsidiary, Kosc Infrastructures, in order to contain the operator's network assets. Guénaël Pépin reviews with the operator these last months in an article from Nextinpact.

While wholesale offers for operators are tending to become more widespread, hopes are essentially focused on Kosc. Indeed, the company, co-founded in 2016 by OVH, aims to break the duopoly of Orange and SFR in this market. To access the local loops of major operators and thus cover the whole of France, Kosc must connect its network to hundreds of NROs. In practice, it recovers Completel's national network to connect to Orange and SFR's local networks. Through these various networks, the company hopes to become a single control point for professional operators.

However, Kosc did not have the financial resources. 100 million over five years to cover the entire private deployment area. The financing of Caisse des Dépôts was therefore necessary. "The investment by the Bank of the Territories makes it possible to finance the implementation of the 100% fibre coverage strategy in the private zone" confirms Kosc. The creation of the Kosc Infrastructures subsidiary allows Caisse des Dépôts to limit its control to major infrastructure decisions. As for Kosc, this allows it to better link its private deployments with future contracts with RIPs. After a year and a half of competition between public and private infrastructure funds, the company's choice "naturally" turned to a RIP concession model. "Caisse des Dépôts was able to make us a financial offer that matched our ambitions. Beyond the financial aspect, she brings us the expertise of her teams who benefit from an excellent understanding of market issues, due to her experience working alongside RIPs" assures Antoine Fournier, General Manager of Kosc.

However, the operation almost failed. Indeed, one of the investment conditions of the Bank of the Territories was the proper technical and legal functioning of Kosc. However, several technical and organizational problems with SFR, when the assets were transferred, took them to court. "Not all the disputes with SFR are behind us, so we don't want to express ourselves any further on the subject. All we can say is that our partners have largely congratulated us on our perseverance during the legal battles of recent months. Just because Kosc is under legal pressure from a powerful player does not mean that Kosc bends" the company says.
 
Despite its disputes with SFR, the network is now operational. The company has around thirty customer operators and has been online since mid-July with more than 2 million eligible catches throughout the country. Even the competition from Bouygues, SFR and Orange on the "bitstream fibre" offers does not worry the operator. "Thanks to the mobilisation of Kosc Telecom teams, there is now a first bitstream fibre offer and your question shows that the market is finally opening up! It is so much better for our operator customers" adds Antoire Fournier. Kosc does not intend to stop there as it now installs itself in "neutral" data centers to open access to its backbone links, its professional fiber collection and enterprise fiber.

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Source : Nextinpact