In light of accelerated technological changes, competitive pressure and the regulatory environment, France Telecom has confirmed the slowdown in growth already reported in Q3 2005, which is expected to result in pro forma sales(1) growth of between 2% and 3% over the full year for 2005. The gross operating margin target(2) (over 18.5 billion euros excluding the 256 million euro fine from the French Competition Council and excluding the impact of Amena) has been maintained for 2005, with CapEx(3) expected to be approximately 12% of revenues, enabling the Group to generate over 7 billion euros in organic cash flow(4), as targeted.

The implementation of NExT, launched during the second half of 2005, has notably been reflected in:
Moves to strengthen the Group’s broadband customer base:
- Over one million wireless broadband customers in France, six months ahead of the provisional schedule as at the end of December 2005
- Europe’s leading operator in terms of the number of ADSL lines
The launch of convergent solutions and improvement of current offerings for both retail and business clients as well as moves to put in place the main business tools needed to drive its transformation forwards (creation of a cross-business strategic marketing function and launch of a training and skills development program for Group's employees).
2006:
The trends observed over the second half of 2005, less favorable than those expected when the NExT plan was announced in June 2005, are expected to continue in 2006 with a pro forma revenue growth(1) of approximately 2%, and actual growth of approximately 7%.
(2) is expected to be between 1 to 2 points in relation to revenues. While protecting its CapEx(3), the priority will be to generate 7 billion euros in organic cash flow(4). These changes do not alter France Telecom's dual commitment to continue reducing debt while improving shareholder compensation.