On April 19, 2007, Standard&Poor's Ratings Services affirmed its 'A-/A-2' long- and short-term corporate credit ratings on French telecommunications services provider France Telecom S.A. (FT), following our review of the group's 2006 results, strategy, and prospects for 2007. The outlook is stable. The ratings reflect FT's resilient operating performance and trading prospects, its underlying solid organic free cash flow generation and, importantly, its disciplined financial policy. FT continues to operate in one of the EU's most competitive domestic broadband markets, with a 51% share in the hands of alternative operators, notably through rapid local loop unbundling. That said, the group has stabilized its asymmetrical-digital-subscriber-line market share and its fixed-line margins by adapting to the competitive environment and proceeding
