The ratings on French telecommunications services provider France Telecom S.A. reflect the group's conservative financial policy and strong organic free cash flow generation ability. The ratings are also supported by France Telecom's leading positions in the French mobile and fixed telecoms markets and the growth opportunity offered by the group's strong, international mobile franchise. The main near-term threat to France Telecom's operating performance is the rapid development of technologies such as local loop unbundling and Voice over Internet Protocol (VoIP) that allow competitors to bypass the group's fixed-line networks. These developments, which are supported by regulatory decisions, have resulted in France having the most competitive asymmetric digital subscriber lines (ADSL) market in Europe, and this is placing significant pressure on
