France Telecom Stéphane Pallez, Deputy CFO · cautionary statement 2 This presentation contains...

1

France TelecomStéphane Pallez, Deputy CFO

France TelecomStéphane Pallez, Deputy CFO

Tokyo, November 29, 2010

Imperial Hotel

2cautionary statementcautionary statement

� This presentation contains forward-looking statements about France Telecom’s business, in particular for 2010, 2011 and 2015. Although France Telecom believes these statements are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties, including matters not yet known to us or not currently considered material by us, and there can be no assurance that anticipated events will occur or that the objectives set out will actually be achieved. Important factors that could cause actual results to differ materially from the results anticipated in the forward-looking statements include, among others, overall trends in the economy in general and in France Telecom’s markets, the effectiveness of the integrated operator strategy including the success and market acceptance of the Orange brand and other strategic, operating and financial initiatives, France Telecom’s ability to adapt to the ongoing transformation of the telecommunications industry, regulatory developments and constraints, as well as the outcome of legal proceedings and the risks and uncertainties related to international operations and exchange rate fluctuations.

� More detailed information on the potential risks that could affect France Telecom's financial results can be found in the Registration Document filed with the French Autorité des Marchés Financiers and in the Form 20-F filed with the U.S. Securities and Exchange Commission. Except to the extent required by law, France Telecom does not undertake any obligation to update forward-looking statements.

3

agendaagenda

2 strategic directions

company highlights1

3 key figures : full year 2009 and Q1 2010

4

France telecom Orange is a convergent telco operator with a diversified footprintFrance telecom Orange is a convergent telco operator with a diversified footprint

France44%

UK10%

Spain7%

Poland7%

rest of the

World16%

enterprises

14%

per geographic area* per line of business

51

181 32

billion euros revenues*

thousand employees

consumer countries 166 enterprise

countries & territoriesin &

* including Orange UK to be merged with T-mobile UK in 2010

personal48%

home34%

enterprises and international

carrier & shared services

18%

international carrier &

shared services2%

in 2009

5

6th worldwide telecom operator6th worldwide telecom operator

41

57

65

75

86

50***

51**

76***

#3mobile operator

#2ADSL operator

#1VoIP operator

#1pay IPTV operator

Orange in EuropeOrange in the world

2009 revenues in €bn*

* exchange rates as of 31/12/2009 from Datastream

** including Orange UK to be merged with T-mobile UK in 2010

*** Reuters consensus estimates as of May 2010 for full year ending March 2010

6

Africa, Middle-EastWestern Europe

France

United Kingdom

Spain

Poland

Romania

MoldaviaSlovakia

Switzerland

Belgium

Central Europe & Central Asia

Austria

Portugal

mobile onlyfixed/ Internet / mobileminority stake fixed / Internet / mobile minority stake mobile only

serving customers in 32 countries and enterprises in 166 countries and territoriesserving customers in 32 countries and enterprises in 166 countries and territories

mobile licence

fixed / Internet / mobile licence

Armenia

Egypt

Jordan

MadagascarDominican Republic

RCA

Botswana

Cameroon

Equatorial Guinea

Mali

Ivory Coast

Senegal

Guinea Bissau

Guinea

Mauritius

CaribbeanReunion Is.

Vanuatu

Kenya

Niger

Uganda

Tunisia

7

sustained customer acquisition in fixed & mobilesustained customer acquisition in fixed & mobile

total group customers

54

132

+9% CAGR

Orangebranded

2009

193

61

2004

125

71 106

27

63

+16% CAGR

mobilebroadband

2009

133

2004

+21% CAGR

2009

13.4

2004

5.1

+10%CAGR

2009

3.5

2005

2.4

advancedand extended business

revenues (bn€)

IPVPN customers (k)

+23%CAGR

2009

323

2004

117

in millions

in millions in millions

* excluding MVNOs customers

mobile group customers*

enterprise highlightsADSL group customers

8

a high financial performancea high financial performance

in bn€

2009

8.35

2008

8.0

2007

7.8

2006

6.9

2005

7.5

* without PagesJaunes and with Amena and UK operations

€ / share

+24% CAGR

2009

1.40

2008

1.40

2007

1.30

2006

1.20

2005

1.00

2004

0.48

4

6

8

10

12

14

2004 2005 2006 2007 2008

in bn€

-34%

2009

32.9*

2008

35.9

2007

38.0

2006

42.0

2005

47.9

2004

49.8

* excluding commitment on ECMS offer

* ROI is HOLT CFROI expressed in nominal terms ;

source : Credit Suisse ValueSearchTM, February

2010

net debt dividend

organic cash flow*return on invested capital* (%)

9

shareholdings shareholdings

billionshares2,649

1.4 eurosper share

French state27.0%

institutional investors

62.8% employees4.5%

retail investors

5.8%

2009 dividend

10

agendaagenda


company highlights1

3 key figures : full year 2009 and Q1 2010

11

strategic axes

first conquest: our employees

second conquest: our networks

third conquest: our customers

fourth conquest: international development

key success

factors

excellence in execution

managerial room for manoeuvre

running the business with a stronger operational focus

conquests 2015:toward a convincing equity story for investorsconquests 2015:toward a convincing equity story for investors

4

3

12

conquests:our employees and our networksconquests:our employees and our networks

our

networks

� management empowered for best execution at local levels

� HR as an essential pillar of our company’s development

� upgrade internal processes and information systems

� manage ahead for future skills requirements

� increase bandwidth and coverage to meet demand

� build up network quality of service

� adjust pricing to best monetize connectivity services

� prepare for the integration of new services

� step up « green telecoms » program (also in Africa)

our

employees

13

conquests:our customers and our international development conquests:our customers and our international development international development

our international development

� become n°1 for quality of service

� simplify products & services portfolio, and leverage customer knowledge

� improve customer experience , innovate in customer relations and loyalty

� capture opportunities in adjacent businesses

� partnerships with content providers always based on technology

� grow our group customer base to 300 millions by 2015

� double revenues in emerging countries by 2015

� leverage network coverage and innovation for competitive advantage

� dedicated CSR programs per country

our

customers

14

conquests 2015:first growth/performance benefits and costs in France

conquests 2015:first growth/performance benefits and costs in France

first growth& operational benefits

� win employees’ commitment

� best-in-class customer experience

� increase our market share

� return to revenues growth

2010-2012

impacts

� €900m over 2010-2012, of which

� €320m for recruitments (10,000 hires)

� €220m for employee benefits

� €360m for improved working conditions

� excluding cost savings from TPS* program and natural attrition

* French part-time senior plan

15

AMEA, an opportunity for profitable growthAMEA, an opportunity for profitable growth

strong presence in Africa & Middle East (19 operations)

Middle East & North Africa

East Africa

&

Indian

Ocean

West

&

Central

Africa

strong market positions foster profitability

mobile market position

# operations

% of cust. base

#1 8 85%

#2 6 13%

#3 or 4 3 2%

% revenues2009

∆ revenues2008-2009

fixed 18.5 % 0.4 %mobile 75.4 % 10.5 %Internet 6.1 % 10.4 %

Internet services in all operations, 6 as incumbents

16

Orange business model for emerging marketsOrange business model for emerging markets

operating model adjusted to local market

best network reachas a competitive differentiator

Orange brand

� use of segmentation to design offers, prepaid lifecycle monitoring

� extend mobile coverage thanks to innovative low cost solutions

� accelerate VAS platforms sharing( Orange Money, mobile TV, mail, VoIP, e-Recharge …)

� best rural coverage

� extensive use of solar-powered base stations

� deploy submarine cables to extend Internet access through mobile

� all new operations launched under Orange brand

� Uganda & Armenia rebranded in 2009; Tunisia in 2010

� 11 brandings or re-brandings in 2 years

positive contributionto Group performance

� customers 50 m

� revenues € 3.4bn, +5.2% proforma vs. 2008

� EBITDA margin 42%

� CAPEX to sales 24%

2009 results

17

agendaagenda


company highlights1

3 key figures : full year 2009 and 3Q 2010

18

in m€

2008

comp. basis

2009

incl. UK

var.comp

basis key points

revenue 51,957 50,952 -1.9%

� FY excl. regulation: +0.2% yoy(1H09: +1.0% and 2H09: -0.6%)

� 4Q09: -3.0% yoy and -0.2% excl. regulation

EBITDA restated* 17,913 17,254 -3.7% � FY EBITDA margin erosion limited to -0.6pt thanks to better 2H

� excluding regulation, EBITDA margin would have been flatin % of rev 34.5% 33.9% -0.6pt

CAPEX 6,688 5,659 -15.4% � continued controlled CAPEX, adjusted to the level of trafficin the different countriesin % of rev 12.9% 11.1% -1.8pts

organic cash flow 8,016 8,350 +4.2% � cash-flow slightly above guidance

due to capex phasing

2009 financial performance above expectations 2009 financial performance above expectations

*restated from 964m€ litigation from taxe professionnelle and EUR 569m accrual for the French part-time

senior plan in 2009

(actual 2009 EBITDA = 15,721m€)

19

sound 3Q10 results & successful commercial momentum in France on both fixed and mobilesound 3Q10 results & successful commercial momentum in France on both fixed and mobile

� solid commercial performance throughout the Group with customer base up by 5.1%

� successful momentum in France: broadband net adds at 32.8%*and stable market share on mobile

� underlying improvement on revenue with a 3Q growth of +1.1% excluding regulation thanks to our value strategy and mobile data take-off

� 9 month margin erosion limited at -0.8pt while building on the Group’s strengthened commercial positioning in 3Q

� increased CAPEX level in 3Q10, FY guidance confirmed at around 12% of revenues

*company estimates

20

203.4 million customers145 m personal customers59 m home customers

5.1%of customer base growth yoy

13.3 millionhome broadband customers

+4.8 million 3Q10 mobile net additions

33.5 millionmobile 3G customers

significant acceleration in 3Q commercial dynamic significant acceleration in 3Q commercial dynamic

some achievements in 3Q10 vs 2Q10

Moldavia:+9.7% revenue

increase to €43m

Egypt:28.4m mobile

customers, +2,3m

France: broadbandnet adds x2 to 32.8%

Spain:+4.5% 3G

customers to 6m

Ivory Coast:+18.6% mobile

customers to 5m

21

ongoing implementation of conquests 2015ongoing implementation of conquests 2015

customersOpen, 1st Orange 4play offer in France

iPhone launch in Spain

mobile segmented offers being replicated throughout EuropeDeezer partnership providing Premium music services to Orange customersnew tagline: today changes with Orange

employeessocial contract summarizing the main outcome from social negotiation communicated to all employees in Francesocial performance indicator becomes part of leading managers incentive-planOrange campus launch, specific programfor management empowerment

international developmentEgypt consolidation: ECMS starting in July, Linkdotnet starting September, +19 million additional customers from 3Q10

partnership with Meditel in Morocco: 10 million customers*

networksLion 2 new submarine cable, Indian Ocean

global business alliance on cloud computing between OBS, Cisco, EMCand VMwareElettra acquisition, reinforcing Group positionas a major cable ship operator

* o/w FT = 40%, closing expected by the end of 2010

22

in €m

9m09

CB9m10 actual

var.comp

basis key points

revenue 34,34433,77

2-1.7%

� +0.4% excluding regulatory impact, better than expected trend

� trends strongly improvingin France, Spain and Enterprise

EBITDA restated* 12,52912,04

2-3.9% � in line with FY Group trends

� sustained commercial activity in 3Qin % of rev 36.5% 35.7% -0.8pt

CAPEX 3,437 3,374 -1.8% � in line with FY guidance “around 12% of revenue”

� catch up expected in 4Qin % of rev 10.0% 10.0% -0.0pt

EBITDA restated* – CAPEX 9,092 8,668 -4.7%� in line with Group FY OCF

guidance

key financial achievements positive YTD underlying revenue growth and margin erosion contained

key financial achievements positive YTD underlying revenue growth and margin erosion contained

*EBITDA restated for DPTG litigation provision for -€266m and TPS for -€70m

23

� increasing coverage of the Orange brand with:

– 63% of Group customers now Orange-branded, still leaving significant further growth potential

� Smartphones now representing close to 50% of mobile devices sold in 3Q in mature markets*

� value strategy driving growth in contract customer base in mature markets

� emerging markets driving customer base volume growth

personal growth driven by both value & volume

3G customer base +36.6%* Group customer base +5.1%*

Group ’s customer base up by +5.1% to more than 200 millionGroup ’s customer base up by +5.1% to more than 200 million

+5.1%

personal

fixed

internet

3Q10

203.4

144.5

45.213.6

3Q09 cb

193.6

133.8

46.213.5

+36.6%

(proportion of 3G customers)

3Q10

33.5

3Q09 cb

24.5

in millions of customers in millions of customers

+8.0%

prepaid

contract

3Q10

144.5

94.4

50.1

3Q09 cb

133.8

86.8

47.0

in millions of customers

(23%)(18%)

* yoy on cb* yoy on cb

+8.0%

* yoy on cb* all countries excluding AMEA & Rep. Dom.

24� Africa and Middle East:

sustained growth drivenby Cameroon and Ivory Coast

� Spain: confirmationof improving operationaland financial performance, success of the iPhone, launched end of July

� France: strong mobile growth mainly driven by stable market share and data traffic take-off

� European countries: Belgium and Switzerland dynamic partially off-setby Central Europe

� Poland: mobile revenue increase thanks to customer base growth

� Enterprise: continued improvement in revenue trend

Africa

&

Middle

East

France

Spain

Poland

Enterprise

European

countries

revenue trend progresses in key geographiesrevenue trend progresses in key geographies

1Q104Q09 2Q10 3Q10

1.9%

0.5%

9.8%*

-3.7%

4.4%**

1.5%

-3.0%

3.3%

1.3%

7.9%*

-4.9%

0.6%

-2.0%

2.9%

0.4%

8.1%*

-7.0%

1.2%

-4.8%

2.0%

0.3%

6.8%*

-5.4%

-2.9%

-6.0%

4Q09-3Q10***

organic revenue growth excluding regulatory impact

yoy in %

on the basis of a consolidation of ECMS in Egypt: * 0%, ** 100%, *** average quarterly growth rate

8.2%

2.5%

0.1%

0.6%

-4.0%

-5.3%

6.8%

25

9m10

in €m actual % yoy cb% yoy cb

excl.reg

Group revenue33,77

2-1.7% +0.4%

France 17,431 -1.6% +0.6%

Spain 2,858 -1.8% +2.7%

Poland 2,936 -6.4% -3.3%

ROW 5,954 +1.8% +3.4%

Africa & Middle-East 2,209 +5,5% +6.3%

European countries 3,327 -1,1% +1.1%

other 427 +4.9% +5.3%

Enterprise 5,356 -5.2% -5.2%

Group

� organic growth excluding regulation strongly positive in 3Q at +1.1%.

Regulation impact decreasing at -€198m in 3Q (-€507m in 1H)

� data take-off in all our mature countries: reaching more than 30% of service revenue in France,

Belgium

and 28.5% in Switzerland

� growth driven by personal services with a strong performance in 3Q in all major geographies

� enterprise yoy cb revenue trend improved in 3Q at -3.7% vs -4.9% in 2Q and -7% in 1Q

top line increase fuelled by personal and mobile data usagetop line increase fuelled by personal and mobile data usage

3Q10

+1.1%

-0.9%

2Q10

+0.3%

-0.3%

4Q09

1Q10

3Q09

-1.0%

organic growth excl. regulationorganic growth

mobile data take-off in mature countries

Spain

17%15%

Europe*

25%22%

France

32%27%

3Q09

3Q10

data revenue as a %of service revenue

* Belgium, Switzerland, Slovakia, Romania

26

dynamic commercial investments with a contained margin erosion in 3Q10dynamic commercial investments with a contained margin erosion in 3Q10

commercia

l & content cost

-249

interc.

cost

-304

revenu

e excl. regul.

+133

regul.

and new

tax

-240

9m09

CB

12,529

forex

& perim.

+27912,250

9m09

actua

l

- 0.8pt

9m1

0

12,042

other

costs

+173

9m10� EBITDA negatively

impactedby regulation and new

taxes

� positive impact of

revenue

(excl. regulation) mainly due to 3Q

� interconnect costs

increase

due to the success of

bundlesand unlimited offers

� ongoing favorable OPEX

base evolution thanks to

cost management

3Q10� commercial & content

costs increase in 3Q driven

by sustained commercial

activity

� a margin erosion

contained at -1.1pt

EBITDA* evolution

in millions of euros

35.7%36.5%

- 1.1pt

3Q1

0

4,260

Other costs

+62

commercial & content

cost

-192

interc. cost

-96

revenue excl.

regul.

+127

regul. and

new

tax

-55

3Q09 CB

4,414

forex &

perim.

+204

3Q09

actua

l

4,210

37.7% 36.6%

9m

10

3

Q1

0

* restated for the DPTG provision in Poland -€266m and part time senior plan -€70m for 9m and -€33m for 3Q

27

CAPEX evolution in 3Q

CAPEX acceleration in Q3 to support customer satisfaction, network capacity and future growthCAPEX acceleration in Q3 to support customer satisfaction, network capacity and future growth


1 2611 1521 054

3Q1

0

+9%

3Q09

CB

forex &

perim.

+98

3Q09

actual

delta

CAPEX

+109

9.4%

Group CAPEX ramp-up over 2010

616595511

1Q1

0

874

2Q1

0

+44%

3Q1

0

1,240 1,261

9.8% 10.8%

� increased CAPEX/sales ratio

by 1.0pt in 3Q10 at 10.8% vs

3Q09, around 12% FY

guidance confirmed

� France:

– ramp-up of FTTH investments

– increase of investments mainly driven by CPEs with the success of Open

� Poland:

– speed up in Poland of the DSL coverage program related to UKE arrangement

– ramp-up of mobile investmentsin Poland and first investments related to HSPA+

� increase of Group IT

investments and launch of multiplay offer

in Belgium

� acceleration of mobile

network investments in

Switzerland

in % of revenues

France

other


* CAPEX/sales ratio

11.1%*8.0%*

10.8%*

28

a prioritised use of cash policya prioritised use of cash policy

shareholder return

maximising the Group’s long-term value

� a commitment of €1.4 per share dividend for the next three fiscalyears (2010 → 2012)

� disciplined M&A with two main focus areas:- emerging markets, with a target to reach about €7bn of revenues by around 2015

- strengthen our position in markets & regions where we already operate (consumer and enterprise markets)

� opportunistic management of the Group’s overall portfolio

� no transformational or equity deals envisaged

mid-term net debt to EBITDA ratio target of 2x

29

revenue

EBITDA margin

CAPEX ratio guidance

confirmed FY 2010 business trends & guidanceconfirmed FY 2010 business trends & guidance

organic cash flow guidance

� 2010 €8bn confirmed*

� 2011 €8bn confirmed*

* excluding licenses & spectrum, litigation on “Taxe Professionnelle”for 2010 and other exceptional items

� underlying trend will be slightly positive

� expected regulatory measures will impact revenue by less than €1bn

� -1pt max of EBITDA margin erosion while sustaining commercial activity

� around 12% of revenue confirmed

� higher level of capex in 4Q10 vs. 9m10

30

appendicesappendices

31

mobilemobile

France20%

UK12%

Spain9%

Poland10%

rest of the world

49%

133 millionmobile customers*

* excluding MVNOs

** 3G and EDGE customers, excluding MVNOs

France37%

UK15%

Spain14%

Poland15%

36million mobile broadbandcustomers**of which

+9% yoy +35% yoy

29 countriesin

rest of the world

19%

32

homehome

France75%

Poland18%

rest of the world

5%

46 millionfixed line customers

France66%

UK6%

Spain8%

rest of the world

4%

14million Internetcustomersand

-1.4% yoy +1.7% yoy

13 countries 21 countriesin in

Spain2%

Poland16%

33

enterpriseenterprisethousandIP-VPNaccesses

+0.5% yoy

in

323

166 enterprise countries & territories

fixed-line telephony

and traditional services

42%

enhanced network services

29%

integration & outsourcing of critical

communication applications

18%

other business services

11%

34

� regulatory price decrease (+€532m o/w +€352m in 2H) absorbed by higher usage and development of unlimited off-net offers

� increasing costs of new operations in emerging markets

� increase of average wage and extra employee incentive schemes

� TV tax & Chatel law impact (-€178m)� lower restructuring

� contingency plan and performance program

� depreciation of Sonaecom stake in 08

� good management of commercial expenses

� full impact of content in 09: -€182m vs 08

� regulatory impact of -€924mo/w -€606m in 2H

Group P&L (1/2)Group P&L (1/2)

regulatory and new taxes EBITDA impact: -€570m (EBITDA margin +0.1pt)

* restated from EUR 569m accrual for the French part-time senior plan within labour costs

and from EUR 964m litigation from taxe professionnelle within general, properties and others

in m€in % of revenue (excl. UK)

FY08 CB FY09 actual

revenue 46,800 45,944

labour costs(8,405)

18.0%

(8,525)

18.6%

o/w profit sharing & share base payments (399) (350)

interconnection(6,444)

13.8%

(6,206)

13.5%

other IT&N(2,701)

5.8%

(2,660)

5.8%

general, properties and others(5,651)

12.1%

(5,470)

11.9%

o/w restructuring (411) (213)

o/w disposals of assets and associates (244) 19

EBITDA* pre com. & content23,599

50.4%

23,083

50.2%

commercial expenses & content costs(6,766)

14.5%

(6,756)

14.7%

EBITDA* restated16,832

36.0%

16,327

35.5%

35

Group P&L (2/2) Group P&L (2/2)

� lower depreciation& amortization benefiting from forex for €216m

�

� impairment test of -400m€in Poland

�

� 08 Spain liquidity mechanism impact

� debt and cost of debt reduced to 6.54% vs. 6.66% end of 08

�

� UK net income is down mainly due to income taxes effect: -43m€ in 09 vs +106m€ in 08

�

� drop on tax due to lower profit and 08 differed tax asset lowered in Spain

�

in m€ and excl. UKFY08

historical

FY09

actualEBITDA restated 16,327

French taxe professionnelle and part time senior plan

-1,533

actual EBITDA 17,083 14,794

depreciation & amortization -6,859 -6,417

impairment of goodwill & assets -279 -518

operating income 9,945 7,859

financial results -2,957 -2,299

tax -2,899 -2,295

net income of discontinued operations 403 200

non controlling interests -423 -468

net income Group share 4,069 2,997

other (provision restatement) 370 1,366

impairment of goodwill 470 445

exceptional on deferred tax 215 0

accrual for employees freeshare program 57 41

comparable net income Group share

5,181 4,849

�

�

�

�

�

36

Group Cash -Flow Statement Group Cash -Flow Statement in m€

FY08

publishe

d

FY09

actual

EBITDA

CAPEX

18,328

6,867

15,721

5,659

EBITDA – CAPEX (incl. UK) 11,461 10,062

net interest expense cash out -2,262 - 1,589

income taxes cash out -878 -620

change in WCR 159 775

licences & spectrum -209 -93

variation of fixed assets suppliers -140 -375

proceeds from sale of assets 233 93

other (cash and non cash items) -348 97

- o/w early retirement plan cash out -661 -484

organic cash flow, consolidated 8,016 8,350

- organic cash flow, Group share7,253 7,617

- organic cash flow, minorities share763 733

�

�

� TDIRA repurchase and currency swap unwinding: positive exceptional impactof €563m

� decrease of net interests paid

�

� lower tax due to lower results in some subsidiaries(Poland, …)

�

� include taxe professionnelle for €964m, to be paid in Jan10

�

� CAPEX reduction impact on fixed asset suppliers

�

�

�

� o/w €569m of non cash senior part time incl. in EBITDA

�

�

37

focus on France operationsfocus on France operations

subscribers (in m)

market share (%)

fixed broadband 8.9 48%

mobile* 26.3 43%

� leader in implementation of

convergent operator strategy

� leading position in VoIP with

contained erosion of traditional voice

� leading mobile operator with data

revenues growing significantly

key strengths 2009 retail customers / market share

key financials

in m€ 2008 CB 2009

sales 23,627 23,639

EBITDA margin 41.4% 41.1%*

CAPEX / sales 9.8% 9.1%

� position Orange as the “digital facilitator”

� increase revenues from optional

offerings and new businesses

� control operational expenses to

compensate for business mix

evolutions and regulatory pressures

key priorities for 2010-2011

* excluding MVNOs

* excluding provision for part time senior plan, otherwise 39.1%)

38

focus on Spain operationsfocus on Spain operations

subscribers (in m)

market share (%)


mobile* 11.9 21%

� demonstrated agility to react to

adverse economic conditions

� service innovation : VoIP, IPTV, 3-

screen strategy

� proven infrastructure sharing and

network outsourcing


key financials

in m€ 2008 CB 2009

sales 4,067 3,887

EBITDA margin 15.1% 18.8%


� become the leading alternative in Spain

� outperform the market in terms of growth

� develop controlled distribution, including online sales

� improve profitability and cash generation


* excluding MVNOs

39

focus on UK operations (integrated July 1 st

2010 with T -Mobile UK)focus on UK operations (integrated July 1 st

2010 with T -Mobile UK)

subscribers (in m)

market share (%)


mobile* 16.5 21%

� regained momentum in a very challenging but attractive market

� successful high value strategy with higher proportion of contract customers

� good mobile broadband position through innovative offers in a fast growing market


key financials

in m€ 2008 CB 2009

sales 5,289 5,108



� gain scale by merging operations with T-Mobile UK and deliver NPV of net opex and capex savings in excess of £3.5bn for the combined entity

� JV new assault on business market, continued leadership in wholesale, and focus on new revenue streams


* excluding MVNOs

40

focus on TP Groupfocus on TP Group

subscribers (in m)

market share (%)


mobile* 13.7 31%

� integrated operator

� own pervasive distribution network

� solid balance sheet in current adverse economic environment

� new medium-term agreement with regulator, allowing greater visibility


key financials

in m€ 2008 CB 2009

sales 4,202 3,831



� regain value and volume momentum vs. competition

� invest significantly in broadband infrastructure to extend coverage and increase speed

� launch new transformation projects : process reengineering, continuous improvement


* excluding MVNOs

France Telecom Stéphane Pallez, Deputy CFO · cautionary statement 2 This presentation contains...

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