Leading supplier of fixed-line and mobile telecommunications services in France. Diversification into a large international mobile operation, primarily in the rest of Europe, the Middle East, and Africa. Robust, organic free operating cash flow generation. Prudent medium-term financial policy. Intense regulatory pressures, particularly in termination rates. Fiercely competitive fixed-line domestic market and likely increasingly competitive mobile operations as well. Somewhat limited flexibility to reduce labor costs, owing to the high number of civil servants in the French fixed-line operation. The ratings on France Telecom S.A. (FT), one of the world's largest integrated telecommunications operators, reflect Standard&Poor's Ratings Services' view of the company's leading positions in the French mobile and fixed-line telecoms markets and the wide diversification that its
