The ratings on France's dominant telecommunications services provider France Telecom S.A. (FT) reflect the company's rapidly improving credit ratios and cash flow generation over the past 12-months, along with its still strong positions primarily in its domestic fixed-line and mobile-telephony markets. FT's credit quality has seen a turnaround in 2003. On-balance-sheet net debt decreased by about €19 billion to €49.3 billion at end-June 2003, thanks mainly to the €15 billion rights issue completed in second quarter and about €1.6 billion in asset disposals. At the same time, profitability measures and cash flow generation improved sharply: For the first half of 2003, FT posted an EBITDA margin of 37.1% and positive free cash flow (FCF; operating cash flow net of capital
