The leading supplier of fixed- and mobile-telecommunications services in France A large, international mobile-telephony franchise, encompassing 100.1 million subscribers across 22 countries as of March 31, 2007 Good group profitability and organic free cash flow in 2006 A conservative financial policy, with an unadjusted net debt-to-gross operating margin target of 2x by year-end 2008 Tough regulation and fierce competition at the access level, particularly in the French ADSL market, and strong competition in the U.K. mobile market Rapid technological changes that are transforming the traditional fixed-line business model, with a still uncertain impact on sales and margins Somewhat limited flexibility to reduce labor costs, owing to its still-high number of civil servants in the French operations The ratings on French
