< In > an article called Orange, Neuf Cegetel et Free cherchent de nouveaux revenus in Le Figaro Economie dated May 7th, 2007, new Free General Manager Maxime Lombardini indicates that FTTH customers will generate a 90% gross margin. This is to be compared with Free's current broadband ARPU of 33 EUR on which they generate a 20 EUR margin (approximately 61%) on fully unbundled customers... < i.e. ADSL customers >.
Coming from an equipment business with 60%-66% gross margins, 90% sounds rather nice to me. Of course, that margin has to pay for the cost of capital to build the FTTH network, but at least I now understand why it's reasonable to simplify FTTH return-on-capital calculations. Assuming all revenues are available to pay off the capital costs is not too far from the truth.