France Telecom financial information - first quarter 2008

Wednesday, May 7th, 2008 
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PARIS — France Telecom Group revenues were 13.027 billion euros in the first quarter of 2008, up from 12.844 billion euros in the first quarter of 2007.

home communication services

Revenues from Home Communication Services (HCS) were 5.649 billion euros in the first quarter of 2008, up 1.3% on an historical basis tied to the positive impact of movements in exchange rates and changes in the scope of consolidation (the positive effect of the acquisition of Spanish company Ya.com was partially offset by the sale of the Orange Internet activities in the Netherlands).

On a comparable basis, revenues remained stable overall compared to the first quarter of 2007. Revenues from ADSL broadband services4 increased 29% and largely offset the declining trend in traditional telephone services. Broadband services represented 23% of total Home Communication Services revenues in the first quarter of 2008 compared to 18% in the first quarter of 2007.

The number of consumer ADSL broadband lines in Europe was 12.0 million at 31 March 2008, up 17.8% year on year on a comparable basis (1.8 million additional ADSL lines).

The number of Liveboxes increased 48% with 6.8 million units sold in Europe by 31 March 2008, compared with 4.6 million at 31 March 2007 on a comparable basis.

The number of Voice over IP customers rose to 5.4 million at 31 March 2008 compared with 3.1 million at 31 March 2007, an increase of 76% on a comparable basis.

Digital TV over ADSL services (IPTV) had 1.41 million subscribers in Europe at 31 March 2008 compared with 770,000 at 31 March 2007, an increase of 83%.

HCS France revenues rose to 4.478 billion euros, up 1.6% on an historical basis and 1.3% on a comparable basis. The increase in consumer ADSL broadband services and services to operators (especially unbundling of telephone lines) was partially offset by the declining trend in traditional telephone services.

The number of consumer ADSL broadband lines was 7.627 million, up 20% compared with 31 March 2007 (1.3 million additional subscribers). ADSL Multiservices likewise showed a rapid increase in the year to 31 March 2008 with:

  • 5.630 million leased Liveboxes, an increase of 44% year on year; Liveboxes represented 74% of ADSL accesses at 31 March 2008, compared with 62% a year earlier;
  • 4.649 million customers for Voice over IP services, an increase of 77%; Voice over IP represented 61% of the number of ADSL subscribers and 83% of leased Liveboxes as of 31 March 2008;
  • 1.282 million ADSL Television (IPTV) customers, up 72%. Video-on-demand (VOD) services surged to 1.064 million paid-for downloads in the first quarter of 2008 from 401,000 in the first quarter of 2007.

At the same time, revenues from traditional telephone subscriptions fell 5.3% both on an historical and on a comparable basis. The unfavourable impact of complete unbundling, of naked ADSL and of wholesale line rental was partially offset by the impact of the rise in telephone subscription prices introduced in July 2007.

The 19.4% reduction in revenues from traditional telephone communications.

key performance indicators of France Telecom

                                           31 March  30 June  30 Sept   31 Dec  31 March
(historical data - millions)                   2007     2007     2007     2007      2008
                                           --------  -------  -------  -------  --------
Home Communication Services (HCS)
  Total number of ADSL customers in Europe   10.187   10.532   11.451   11.652    12.019
  Total number of Liveboxes                   4.765    5.216    5.717    6.100     6.783
  Total number of ADSL TV customers           0.768    0.872    1.017    1.243     1.407

HCS France - Consumer Market
  Number of Liveboxes                         3.916    4.273    4.692    5.209     5.630
  Number of ADSL TV customers                 0.745    0.837    0.975    1.149     1.282

HCS Spain
  Number of ADSL TV customers                 0.014                                0.075

HCS Poland
  Number of ADSL TV customers                 0.009                                0.049

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