The ratings reflect France Telecom S.A.'s (FT) leading positions in the French mobile and fixed-line telecommunications markets, and the diversification provided by its rapidly growing international mobile franchise; together, these result in robust, sustainable free operating cash flow (FOCF) generation. The ratings also take into account the group's moderate leverage. They remain constrained, however, by the high competition in France's broadband market, the rapid technological changes transforming the traditional fixed-line business model, and the group's somewhat limited flexibility to reduce labor costs owing to the still-high number of civil servants in its domestic workforce. France has one of the most competitive broadband markets in the EU, with 53% held by alternative operators, notably through rapid local-loop unbundling. Nevertheless, FT has
