Standard&Poor's said today that the French government's revision of UMTS (Universal Mobile Telecommunications System) license conditions will not materially affect the credit quality of France Telecom (BBB+/Negative/A-2) and Vivendi Universal S.A. (BBB/Watch Neg/A-2). The revised conditions will have a mixed impact on the two groups over the next few years. While the upfront payments by the groups in 2001 and 2002 will be reduced by approximately €1.9 billion, the much lower price will likely entice two other telecommunications operators to bid for a license in the relatively less mature French market. Standard&Poor's therefore expects competitive pressures to increase in France as the UMTS networks are rolled over and new competitors seek actively to gain market share.
