Leading supplier of fixed- and mobile-telecommunications services in France Diversification into a large international mobile operation Robust organic free cash flow generation (€7.8 billion, unadjusted, in 2007) Prudent medium-term guideline of below 2x for unadjusted net debt to gross operating margin, allowing for temporary excesses Operations in some of the most competitive markets in Europe: broadband in France and mobile in the U.K. Rapid technological changes transforming the traditional fixed-line business model Somewhat limited flexibility to reduce labor costs, owing to the high number of civil servants in the French fixed-line operation The ratings reflect France Telecom S.A.'s leading positions in the French mobile and fixed-line telecommunications markets, and the diversification provided by its growing international mobile footprint. Together, these
