2006 preliminary unaudited annual results: France Telecom results and cash-flow generation slightly above objectives

Paris, February 1, 2007

2006 revenues of 51.7 billion euros, an increase of +7.5% on an historical basis and 1.2% on a comparable basis

5.2% increase in mobile service revenues (on a comparable basis) driven by very strong growth in the number of customers

* 15% increase in the mobile customer base on a comparable basis with 97.6 million customers at December 31, 2006, and a sharp acceleration in the number of mobile broadband users, with 5.8 million customers at December 31, 2006, compared with 1.6 million a year earlier

Rapid development of ADSL broadband and associated Multi-service offers limiting the decrease in revenues from home services to 1.9% (on a comparable basis)
* 30% increase in ADSL Broadband accesses over the year with 9.7 million customers in Europe at December 31, 2006
* Rapid development of ADSL Multi-service offers with 4.1 million Liveboxes deployed in Europe at the end of 2006, 2.5 million Voice over IP customers, and 590,000 ADSL digital TV customers

Gross Operating Margin Rate of 35.9% for 2006, in line with the objective announced

Gross Operating Margin of 18.5 billion euros, with the decline in the margin rate of 1.4 points (on an historical and comparable basis), in line with the stated objective (decrease in margin of 1 to 2 points)

Net Income Group share stable on a comparable basis

The Net Income (Group share) for 2006 is expected to be between 4.0 and 4.2 billion euros compared to 5.7 billion euros in 2005. On a comparable basis (i.e. adjusted for exceptional items) it is stable at about 3.9 to 4.1 billion euros for 2006 compared with 3.9 billion euros in 2005.

Ratio of CAPEX to Revenues of 13% in 2006, in line with the objective announced, compared with 12.5% in 2005

Organic cash-flow of 7.15 billion euros in 2006, ahead of the stated objective of 6.95 billion euros (objective adjusted, including PagesJaunes until the date of disposal)

Strong reduction in the debt ratio (net debt / GOM), to around 2.27 at December 31, 2006 versus 2.48 at December 31, 2005, on track to meet the objective of 2 for the end of 2008

To know more about these financial results, please see also the pdf enclose


For further information :
The documents for the presentation prepared for the publication can be viewed on the France Telecom website: www.francetelecom.com/en/financials/investors/presentations/annual/index.html

Financial Communication Contacts:
+ 33 1 44 44 89 23
Vincent Benoit
Vincent.benoit@orange-ftgroup.com
Sophie Palliez-Capian
sophie.palliez@orange-ftgroup.com
Reza Samdjee
reza.samdjee@orange-ftgroup.com
Caroline Billeaud
caroline.billeaud @orange-ftgroup.com

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