w e l c o m e t o t h e f r a n c e t e l e c o m i n v e s t o r d a y
TRANSCRIPT
W e l c o m e t o t h W e l c o m e t o t h ee
F r a n c e T e l e c o F r a n c e T e l e c o m m
I n v e s t o r D a yI n v e s t o r D a y
W e l c o m e t o t h W e l c o m e t o t h ee
F r a n c e T e l e c o F r a n c e T e l e c o m m
I n v e s t o r D a yI n v e s t o r D a y
I n v e s t o r D a y
I n v e s t o r D a y
Innovation and GrowthInnovation and Growth
N o v e m b e r 1 2 t h , 2 0 0 3N o v e m b e r 1 2 t h , 2 0 0 3
Objectives of the Day Objectives of the Day
Explain France Telecom view of innovation and
partnerships as growth and cost efficiency drivers
Explain why and how France Telecom growth initiatives
will support our growth targets
Demonstrate ExCom members involvement in these
projects
Update on business trends for 2004 and 2005
Confirm guidance on upper range of 3 - 5% revenue growth
for 2003 - 2005
Confirm guidance on upper range of 3 - 5% revenue growth
for 2003 - 2005
Agenda for the Day (1)Agenda for the Day (1)
1. Innovation to serve clients needs Th. Breton
2. Growth initiatives- Broadband D. Lombard
- Ease of Use S. Ahuja
- Corporate solutions B. Dalibard
3. Partnerships and growth D. Lombard
4. Cost effective IT and Networks
- Network evolution J.-Ph. Vanot
- IT effectiveness J.-P. Cottet
- Roadmap to convergence S. Ahuja
- Sourcing L.-P. Wenes
Agenda for the Day (2)Agenda for the Day (2)
5. Lunch and demos
6. Business Review M. CombesO. Sichel
W. VerstaeteJ.-Y. Gouiffès
B. DalibardJ.-P. Cottet
7. Conclusion F. Dangeard
8. Q & A ExCom
CAUTIONARY STATEMENT CAUTIONARY STATEMENT
This presentation contains forward-looking statements about France Telecom. Such statements are not historical facts and include expressions of management’s expectations about new and existing programs, opportunities, technology and market conditions. Although France Telecom believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties. These statements should not be regarded as a representation that anticipated events will occur or that expected objectives will be achieved. Important factors that could cause actual results or performance to differ materially from the results anticipated in the forward-looking statements include, among other things, the success of the announced FT 2005 plan, including the “15 + 15 + 15” plan and the TOP program, changes in economic, business and competitive markets, technological trends, France Telecom’s other strategic, financial and operating initiatives, risks and uncertainties attendant upon international operations, exchange rate fluctuations and market regulatory factors. More detailed information on the potential factors that could affect the financial results of France Telecom is contained in the Document de référence submitted to the COB on March 21, 2003 and in its Form 20-F filed with the U.S. Securities and Exchange Commission. The forward-looking statements contained in this document speak only as of the date of this presentation and France Telecom does not undertake to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
This presentation contains forward-looking statements about France Telecom. Such statements are not historical facts and include expressions of management’s expectations about new and existing programs, opportunities, technology and market conditions. Although France Telecom believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties. These statements should not be regarded as a representation that anticipated events will occur or that expected objectives will be achieved. Important factors that could cause actual results or performance to differ materially from the results anticipated in the forward-looking statements include, among other things, the success of the announced FT 2005 plan, including the “15 + 15 + 15” plan and the TOP program, changes in economic, business and competitive markets, technological trends, France Telecom’s other strategic, financial and operating initiatives, risks and uncertainties attendant upon international operations, exchange rate fluctuations and market regulatory factors. More detailed information on the potential factors that could affect the financial results of France Telecom is contained in the Document de référence submitted to the COB on March 21, 2003 and in its Form 20-F filed with the U.S. Securities and Exchange Commission. The forward-looking statements contained in this document speak only as of the date of this presentation and France Telecom does not undertake to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Ambition FT 2005: Commitments to Master our Destiny
Ambition FT 2005: Commitments to Master our Destiny
The foundation for a comprehensive transformation of France Telecom
The foundation for a comprehensive transformation of France Telecom
ImplementImplement New New
ManagementManagement&&
NewNewOrganizationOrganization
ImplementImplement New New
ManagementManagement&&
NewNewOrganizationOrganization
Address liquidity constraintsAddress liquidity constraints & restore balance & restore balance
sheet structure sheet structure
Address liquidity constraintsAddress liquidity constraints & restore balance & restore balance
sheet structure sheet structure
Execute an ambitiousExecute an ambitious but realistic transformation but realistic transformation
program program
Execute an ambitiousExecute an ambitious but realistic transformation but realistic transformation
program program
Refocus on Strategic Refocus on Strategic Priorities Priorities
Refocus on Strategic Refocus on Strategic Priorities Priorities
15+15+1515+15+15
TOPTOP
Assets disposalsAssets disposalsNew ServicesNew Services
InnovationInnovation
New management principlesNew management principles New management & new incentive schemes
– Renewal of the Executive committee– Assessment of the Executive committee members every 6 months
– 6 months objectives and assessment at all levels– Key executives talent review– 700 entrepreneurs network
Tightened operational integration:– Strong integration of Operations and Corporate Functions– SEVP in charge of FT 2005 coordination– New Internal governance bodies– Group level planning procedures for R&D, network and IT– Full integration of sourcing
Project based transformation approach – 100 TOP programs– 40 division-led growth projects– 14 transversal growth projects
Adapt permanently skills, talents and responsibilities according to performance and objectives
Adapt permanently skills, talents and responsibilities according to performance and objectives
A management team that is delivering on FT’s commitmentsA management team that is delivering on FT’s commitments
TOP ahead of targets, initial 2003 targets reachedTOP ahead of targets, initial 2003 targets reachedover 9 months. FCF in 2003 EUR1bn ahead of initialover 9 months. FCF in 2003 EUR1bn ahead of initialtarget target
Improve Improve OperationalOperationalPerformancePerformance
Improve Improve OperationalOperationalPerformancePerformance
Achieved in H1 2003, liquidity crisis fully solvedAchieved in H1 2003, liquidity crisis fully solved
Debt refinancingDebt refinancingDebt refinancingDebt refinancing
The track record : clear road map, delivering quicker and over expectations, building momentum
The track record : clear road map, delivering quicker and over expectations, building momentum
Achieved in H1 2003, EUR15bn raised.Achieved in H1 2003, EUR15bn raised.FT regains the initiativeFT regains the initiative
Restore theRestore thebalance sheetbalance sheetRestore theRestore thebalance sheetbalance sheet
EUR 2.7bn asset disposal so far in 2003.EUR 2.7bn asset disposal so far in 2003.Offer on Orange.Offer on Orange.
Focus onFocus onStrategic assetsStrategic assetsFocus onFocus onStrategic assetsStrategic assets
Commitments Results
40 Growth programs launched + 14 Transversal40 Growth programs launched + 14 Transversal
Innovation Innovation and Growthand GrowthInnovation Innovation and Growthand Growth
A sustained tempo, a clear roadmapA sustained tempo, a clear roadmap
Building a strong momentum as early as the first yearBuilding a strong momentum as early as the first year
““15 Bn”15 Bn”debtdebt
refinancing refinancing
““15 Bn”15 Bn”debtdebt
refinancing refinancing
““15bn” capital15bn” capital increaseincrease
““15bn” capital15bn” capital increaseincrease
TOP aheadTOP aheadof targetsof targets
in Q1in Q1
TOP aheadTOP aheadof targetsof targets
in Q1in Q1
TOP aheadTOP aheadof targetsof targets
in Q2in Q2
TOP aheadTOP aheadof targetsof targets
in Q2in Q2
“ “FT ambitionFT ambition2005”2005”New New
ManagementManagementNew New
OrganizationOrganization15/15/1515/15/15
Top ProgramTop Program
“ “FT ambitionFT ambition2005”2005”New New
ManagementManagementNew New
OrganizationOrganization15/15/1515/15/15
Top ProgramTop Program
TOP aheadTOP aheadof targetsof targets
in Q3in Q3
TOP aheadTOP aheadof targetsof targets
in Q3in Q3
Leadership inLeadership in WiFi deployment WiFi deploymentLeadership inLeadership in
WiFi deployment WiFi deploymentSMS SMS
on fixed lineon fixed lineSMS SMS
on fixed lineon fixed line
GrowthGrowth Initiatives Initiativeslaunchedlaunched
GrowthGrowth Initiatives Initiativeslaunchedlaunched
TV on TV on ADSLADSL
TV on TV on ADSLADSL
Integrated Integrated offers for offers for
SME SME Intranets and Intranets and networkingnetworking
Integrated Integrated offers for offers for
SME SME Intranets and Intranets and networkingnetworking
Law removingLaw removingFrench StateFrench State
majority holding majority holding obligation obligation
Law removingLaw removingFrench StateFrench State
majority holding majority holding obligation obligation
OrangeOrange offering offeringOrangeOrange offering offering
Orange Orange worldworld
Orange Orange worldworld
Accelerated Accelerated Broadband Broadband coverage of coverage of
FranceFrance
Accelerated Accelerated Broadband Broadband coverage of coverage of
FranceFrance
Wanadoo Wanadoo photo photo albumalbum
Wanadoo Wanadoo photo photo albumalbum
Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct
A world still organized today around separate networks and services
A world still organized today around separate networks and services
Mobile network and services
Internet network and services
Fixed network and services
Access specific terminals
Access specific services
Independent service platforms
Multiple customer identifiers
Separate billing
The most important paradigm
change the industry
has ever seen
The most important paradigm
change the industry
has ever seen
In our vision the user is the center of his communications universeIn our vision the user is the center of his communications universe
The customer defines and personalizes his services
Services become multi-access
Focal point is shifting from the network to the user
The customer is at the center of the network
Communication
Information/entertainment
Transactions
EXPLOSION OF USAGES: WHAT YOU WANT,
WHERE YOU WANT, WHEN YOU WANT
EXPLOSION OF USAGES: WHAT YOU WANT,
WHERE YOU WANT, WHEN YOU WANT
Five major technology discontinuities will enable this revolution
Five major technology discontinuities will enable this revolution
Broadband everywhereBroadband everywhere
Delayered Delayered and open and open networknetworkand IT platformsand IT platforms
IP networkIP network1
2
Multi-access Multi-access innovative devicesinnovative devices
45
Ubiquitous wirelessUbiquitous wireless3
Service platforms
2
•Physical networks / •transport
•Physical networks / •transport
1
Transaction
systems
3
IP Networks: The cornerstone of a delayered infrastructureIP Networks: The cornerstone of a delayered infrastructure
1
A revolution similar to the IT
revolution
A revolution similar to the IT
revolution
2G
TPS
Third parties
Data con-vergence applica-tions
Soft-switch(voice)
Content
IP gateway
3G
WIFI
Mobile
2G/2.5G
Backbonemobile
Network database (e.g.,HLR)
Fixed line (voice)
Switching PSTN
IN
Data
DSL
FR/X25/ATMLeased line
Edge router
ISP Platform
FR/X25/ATM
Subscriber switching
Back-boneIP
IN
IP access DSL FTTH Cable
IP backbone
Device Open network Services
Home Broadband: The connection for future multi-service delivery
Home Broadband: The connection for future multi-service deliveryHome services
Home gatewayHome
gatewayBroadband access
TV
Voice over IP
Interactive gaming
Internet
Visual phone
@
New bandwidth- enabled services
Access throughput continuously increasing
Devices capability upgrade and interoperability
Wireless home networkSecurity
Surveillance
2
cv
Wireless
Broadband-enabled centralized ITand network architectures
Broadband WAN/LAN
(2-10 Mbps)
Data processing center
PrinterPrintersPCs
Branch office
Telco datacenter
Enterprise Broadband: Accelerated IT transformationEnterprise Broadband: Accelerated IT transformation
Benefits for the enterprise
Accelerated consolidation of applications and information
Ubiquitous information for users and applications
Extension of functionalities to all locations and mobile workers
Rationalization of support costs (hardware, local support personnel)
Increased operational flexibility for deployment of new applications
2
Laboratory for InteroperabilityLaboratory for Interoperability
Wireless: From mobility to ubiquitous accessibilityWireless: From mobility to ubiquitous accessibility
Personal services
Mobile Hotspots
Office
Ubiquitous accessibilityto personalized services
Access independent
Contact lists
Extended reachability
Unique authentication
3
Multi-access innovative devices Multi-access innovative devices
New powerful portable terminals
MP3 player with 40 GB hard drive
Can also be used for storage e.g., personal documents, picture albums
16 Mb Smart phones
With 2 Megapixels camera
New terminals allowing interoperability
Wireless B media adapter
•<Digital Video
Entertainment Net
X-Box MP3
"Home network"
Wireless Listening to digital music
with existing stereo Digital images on TV Music and images
selection wit remote control and screen menu
Enhanced user interface
New capabilities
Interoperability between home / personal and entertainment / office
Partnershipwith key manufacturers / software vendors
4
Open systems enhancing interoperability of telecom services
Open systems enhancing interoperability of telecom services Services based on software platforms
connected to IP network
Standard APIs
Rapid service deployment
Network independent customer management
Innovative tariffs and products
Higher capillarity
Dynamic capacity managements
Lower operational costs
5
Transaction systems
Transaction systems
Transport network
Transport network
Service platformService platform
Customer identifierCustomer identifier
Reshaping France TelecomReshaping France Telecom
Close to local customer, Close to local customer, but leveraging global but leveraging global
platforms platforms
Close to local customer, Close to local customer, but leveraging global but leveraging global
platforms platforms
Access and voice narrowband
Access and voice mobile
Broadband and Internet services
Managed data services
From…
Home communication services
Personal communication services
Enterprise communication services
… To
The engine of France Telecom transformationThe engine of France Telecom transformation
Network and IT infrastructure convergence
Strategic partnerships
World class customer management
Lean operations
High quality customer experience (QoS, Customer Care)
Home communications
Personal communications
Enterprise communications
Operational
excellence
Usage and
business
model
innovation
for growth
FT has a unique set of strengthsFT has a unique set of strengths
CustomersCustomers
SkillsSkills AssetsAssets
A committed management
team
Over 50 million Homes Over 50 million Personal Over 500K Enterprises
Fixed, mobile and internet networks
Strong brands Global IP network Presence in 220
countries
Strong R&D capabilities
Complex technology/system integration capabilities
Network deployment capabilities
Service quality culture
Experience in leveraging partnership
France Telecom masters technology and leverages it for services innovation
France Telecom masters technology and leverages it for services innovation
2G
TPS
Third parties
Datacon-vergence applica-tions
Soft-switch(voice)
Content
3G
WIFI
IP backbone
Tra
nsactio
n
pla
tform
s
Presence Reachability Payment Security
IP networks (IP-VPN, MPLS, QoS, …)
Gateways and home terminals
Handset middleware User-friendly interface
Identity and authentication
Contact list Instant messaging
High speed access
A structured growth program: Top LineA structured growth program: Top Line
40 Division-led growth projects
14 transversal growth projects to develop and launch new services
All projects under ExCom member leadership
Strong mobilization of the company
Quarterly review of program
Growth projectsGrowth projectsOrange
Improve customer mix Yield Management IN Services Key Non Voice Services Signature Devices 3G Rollout Business Services Transversal Projects Roaming Initiatives
Wanadoo
Increase value for Broadband in France
Increase our position on Broadband in Spain
Improve our positioning in the UK
Develop paid services Develop B-to-B mobile
interactive services Capitalize on directories
Wanadoo
Increase value for Broadband in France
Increase our position on Broadband in Spain
Improve our positioning in the UK
Develop paid services Develop B-to-B mobile
interactive services Capitalize on directories
Fixed Line, Voice and Data Services in France
Increase market coverage Boost sales of accessories Develop self care Revisit marketing mix of small
business Relaunch fixed handsets sales Maximize value of high
potential customers PBX - IPBX Broadband everywhere with
satellite and WiFi Increase Intranet revenues on
SMEs Fight competition on dense
MAN areas Close large outsourcing deals Develop CPE services Application Managed Services
Fixed Line, Voice and Data Services in France
Increase market coverage Boost sales of accessories Develop self care Revisit marketing mix of small
business Relaunch fixed handsets sales Maximize value of high
potential customers PBX - IPBX Broadband everywhere with
satellite and WiFi Increase Intranet revenues on
SMEs Fight competition on dense
MAN areas Close large outsourcing deals Develop CPE services Application Managed Services
International, Voice and Data Services
Equant indirect channel efficiency
TP Group : Accelerate fixed line penetration
TP Group : Accelerate data development
TP Group : develop mobile penetration
Strengthen Uni2 market position
ROW new initiatives International voice revenues
International, Voice and Data Services
Equant indirect channel efficiency
TP Group : Accelerate fixed line penetration
TP Group : Accelerate data development
TP Group : develop mobile penetration
Strengthen Uni2 market position
ROW new initiatives International voice revenues
Identity / Authentication Address Presence Reach Payments Office ADSL Multiservice
Identity / Authentication Address Presence Reach Payments Office ADSL Multiservice
Video-Telephony VOIP DRM Content synergies Control of Services Data mining, Segmentations
and market studies synergies Distribution synergies
Video-Telephony VOIP DRM Content synergies Control of Services Data mining, Segmentations
and market studies synergies Distribution synergies
TransversalTransversal
Significant growth coming from better executionSignificant growth coming from better execution
Orange Orange
Wanadoo Wanadoo
FDFFDF
Usage &
business
model
innovation
for growth
Customer mix improvement Yield management
Churn management Marketing Spend
effectiveness
Sales agency effectiveness Marketing mix improvement
for pro clients
Operational
excellence
Project Examples
Usage innovation: today’s focusUsage innovation: today’s focus
Ease of use in personal communications
New broadband services
Bandwidth-enabled enterprise IT transformation
Usage
& business
model
innovation
for growth
Operational
excellence
Growth domains highlighted
IdentityIdentityAuthenticationAuthenticationIdentityIdentityAuthenticationAuthentication
A commonA common identity identity to access all relevant personal services, to access all relevant personal services, with strongwith strong authentication authentication for trusted accessfor trusted access
Contacts listContacts listContacts listContacts list A uniqueA unique contacts list contacts list available on any device and network,available on any device and network,secured by thesecured by the identity identity and facilitating connectionsand facilitating connections
PresencePresencePresencePresence Knowing theKnowing the presence presence/availability on any network/availability on any networkof someone from myof someone from my contacts list contacts list
PaymentPaymentPaymentPayment A flexibleA flexible payment payment of network services and content,of network services and content,secured bysecured by identity-authentication identity-authentication
The capacity toThe capacity to reach reach someone on/from any network/devicesomeone on/from any network/deviceaccording to his/heraccording to his/her presence presenceReachabilityReachabilityReachabilityReachability
Ease of use: Develop usage through seamless use and simplicityEase of use: Develop usage through seamless use and simplicityProjects
2003200320032003
Ease of use milestones & commitmentsEase of use milestones & commitments
2004200420042004 2005 & over2005 & over2005 & over2005 & over
Q2 2003Q2 2003Q2 2003Q2 2003
H1 2004H1 2004H1 2004H1 2004
H1 2004H1 2004 H1 2004H1 2004
H2 2004H2 2004H2 2004H2 2004
H2 2005H2 2005H2 2005H2 2005
Q3 2004Q3 2004Q3 2004Q3 2004
• Single Sign On (SSO) for FT group portalsSingle Sign On (SSO) for FT group portals
• W-HA Common payment indentifierW-HA Common payment indentifier
• Orange contact list in UKOrange contact list in UK
• Single contact list for fixed and WanadooSingle contact list for fixed and Wanadoo• Voice and video on Wanadoo’Voice and video on Wanadoo’
Instant MessagingInstant Messaging
• Full interoperable contacts listFull interoperable contacts list
• Wanadoo-Orange IM interoperabilityWanadoo-Orange IM interoperability
• Presence-based contact list Presence-based contact list
• Seamless fixed, mobile voice mails Seamless fixed, mobile voice mails
• Automatic call forwarding fixed-to-mobileAutomatic call forwarding fixed-to-mobile
Q2 2004Q2 2004Q2 2004Q2 2004
Q3 2004Q3 2004Q3 2004Q3 2004
H1 2005H1 2005H1 2005H1 2005
H1 2005H1 2005H1 2005H1 2005 • Mobile-to-fixed call forwardingMobile-to-fixed call forwarding
• Single merchant kitSingle merchant kit
• Large scale deployment of paymentLarge scale deployment of payment
Q3 2004Q3 2004Q3 2004Q3 2004
Q4 2004Q4 2004Q4 2004Q4 2004
H2 2005H2 2005H2 2005H2 2005 • Trusted ID providerTrusted ID provider
Q4 2004Q4 2004Q4 2004Q4 2004
Additional revenues based on an available & already invested network
Additional revenues based on an available & already invested network
Personal CommunicationPersonal Communication TransactionTransaction
EntertainmentEntertainmentPersonal ContentPersonal Content
BroadbandBroadband
Personal Personal telephonytelephony
SoftwareSoftwaredownloadingdownloading
VODVODQ4 2003
TV onTV onADSLADSL
Q4 2003Q4 2003
GamesGames
Image Image messagingmessaging
Photo Photo & Video & Video AlbumsAlbumsQ3 2003Q3 2003
Home Home networkingnetworking
VideoVideotelephonytelephonyQ2 2004Q2 2004
Broadband: Expanding servicesBroadband: Expanding services
2003200320032003
Broadband’s milestones & commitmentsBroadband’s milestones & commitments
2004200420042004 2005 & over2005 & over2005 & over2005 & over
Q4 2003Q4 2003Q4 2003Q4 2003
Dec. 2003Dec. 2003Dec. 2003Dec. 2003
Q2 2004Q2 2004Q2 2004Q2 2004
Q2 2004Q2 2004Q2 2004Q2 2004
H2 2004H2 2004H2 2004H2 2004Q2 2004Q2 2004Q2 2004Q2 2004
End 04End 04End 04End 04
2005200520052005
End 2008End 2008End 2008End 2008
• Satellite Internet accessSatellite Internet access
• TV-over-DSL launch in LyonTV-over-DSL launch in Lyon
• 3G field test in Lille, Paris & Toulouse3G field test in Lille, Paris & Toulouse
• TV-over-DSL launch in ParisTV-over-DSL launch in Paris
• Interoperability fixed & mobile Interoperability fixed & mobile video-telephonyvideo-telephony
• Non-PC video-telephonyNon-PC video-telephony
• 3G full-scale product launch3G full-scale product launch
• Video-over-DSL in foreign Video-over-DSL in foreign subsidiaries subsidiaries
• Target of 10% of pay TVTarget of 10% of pay TV
Q4 2003Q4 2003Q4 2003Q4 2003 • Wanadoo visio trialWanadoo visio trialJun. 2003Jun. 2003Jun. 2003Jun. 2003 • WiFi home routerWiFi home router
Corporate solutions: enhancing enterprise performance through bandwidth enabled IT-transformation
Corporate solutions: enhancing enterprise performance through bandwidth enabled IT-transformation
Offer employees on the move access to their work environment whatever their devices and networks, and wherever they are
Mobile workersMobile workers
Customer premises equipment
Customer premises equipment
OutsourcingOutsourcing
End-to-end management of customer communications needs including PBX, LAN/WAN integration and communications-based applications (messaging & security)
Integrated management of networks, IT infrastructure and services
Project Examples
2003200320032003
Corporate Solutions’ milestones & commitmentsCorporate Solutions’ milestones & commitments
2004200420042004 2005 & over2005 & over2005 & over2005 & over
Q4 2003Q4 2003Q4 2003Q4 2003
Q1 2004Q1 2004 Q1 2004Q1 2004
Q3 2004Q3 2004Q3 2004Q3 2004
H1 2004H1 2004H1 2004H1 2004
• Convergence of voice VPN and IP VPNConvergence of voice VPN and IP VPN
• 1000 wifi hotspots1000 wifi hotspots
• Integrated nomadism offers for SME & Integrated nomadism offers for SME & enterprises in Franceenterprises in France
• Similar services by FT subsidiaries Similar services by FT subsidiaries abroadabroad
• Nomadism offers available in the UKNomadism offers available in the UK
• IP centrex offer launch IP centrex offer launch
• Business continuity solutionsBusiness continuity solutions(security data center)(security data center)
Q3 2004Q3 2004Q3 2004Q3 2004
H1 2005H1 2005H1 2005H1 2005
• Nomadism offers available for Equant Nomadism offers available for Equant customerscustomers
Q3 2004Q3 2004Q3 2004Q3 2004
H1 2005H1 2005H1 2005H1 2005 • Nomadism solutions extended to voiceNomadism solutions extended to voice and IM and IM
Q4 2004Q4 2004Q4 2004Q4 2004
Q4 2003Q4 2003Q4 2003Q4 2003 • Partnership with Accor, AF,…Partnership with Accor, AF,…
Q4 2003Q4 2003Q4 2003Q4 2003 • Larger salesforce dedicated to IT & C Larger salesforce dedicated to IT & C infrastructure servicesinfrastructure services
FT’s Network and IT: Convergence toenable usage innovation
FT’s Network and IT: Convergence toenable usage innovation
Availability of consistent services and applications Availability of consistent services and applications across networks based on open platformsacross networks based on open platforms
ServicesServicesplatformsplatformsServicesServicesplatformsplatforms
Convergence of transport of voice and data over Convergence of transport of voice and data over mobile and fixed networks, allowing reduced spending mobile and fixed networks, allowing reduced spending and consistent standard of servicesand consistent standard of services
ConvergenceConvergencenetworknetworkConvergenceConvergencenetworknetwork
Simplification and convergence of IT operations and Simplification and convergence of IT operations and key applications such as CRM and content billing key applications such as CRM and content billing across the companyacross the company
IT infrastructureIT infrastructureIT infrastructureIT infrastructure
Leveraging strategic partnershipsLeveraging strategic partnerships
TechnologiesTechnologies DistributorsDistributors
ContentContent Equipment and software providerEquipment and
software provider
France TelecomFrance
Telecom
Gain competitive edge Ability to integrate
technologies
•Liberty alliance / Jabber
•TPS/ TF1 for TV over ADSL•Nortel, alcatel, Nokia on 3G mobile services
•Microsoft & Handspring for smartphones
•Sony to connect game consoles through ADSL
ConclusionConclusion
• France Telecom : a multi communication services company for home, personal and enterprise markets….not a utility
• Growth initiatives are setting a growth momentum for 2004 and beyond
Higher part of the +3%* to +5%* rangeHigher part of the +3%* to +5%* range
Objective 2004-5Objective 2004-5Objective 2004-5Objective 2004-5
Growth initiatives
Growth initiatives
BroadbandBroadband Didier Didier LombardLombard
Simplicity drives usageSimplicity drives usage Sanjiv AhujaSanjiv Ahuja Corporate SolutionsCorporate Solutions Barbara Barbara
DalibardDalibard
CAUTIONARY STATEMENT CAUTIONARY STATEMENT
This presentation contains forward-looking statements about France Telecom. Such statements are not historical facts and include expressions of management’s expectations about new and existing programs, opportunities, technology and market conditions. Although France Telecom believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties. These statements should not be regarded as a representation that anticipated events will occur or that expected objectives will be achieved. Important factors that could cause actual results or performance to differ materially from the results anticipated in the forward-looking statements include, among other things, the success of the announced FT 2005 plan, including the “15 + 15 + 15” plan and the TOP program, changes in economic, business and competitive markets, technological trends, France Telecom’s other strategic, financial and operating initiatives, risks and uncertainties attendant upon international operations, exchange rate fluctuations and market regulatory factors. More detailed information on the potential factors that could affect the financial results of France Telecom is contained in the Document de référence submitted to the COB on March 21, 2003 and in its Form 20-F filed with the U.S. Securities and Exchange Commission. The forward-looking statements contained in this document speak only as of the date of this presentation and France Telecom does not undertake to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
This presentation contains forward-looking statements about France Telecom. Such statements are not historical facts and include expressions of management’s expectations about new and existing programs, opportunities, technology and market conditions. Although France Telecom believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties. These statements should not be regarded as a representation that anticipated events will occur or that expected objectives will be achieved. Important factors that could cause actual results or performance to differ materially from the results anticipated in the forward-looking statements include, among other things, the success of the announced FT 2005 plan, including the “15 + 15 + 15” plan and the TOP program, changes in economic, business and competitive markets, technological trends, France Telecom’s other strategic, financial and operating initiatives, risks and uncertainties attendant upon international operations, exchange rate fluctuations and market regulatory factors. More detailed information on the potential factors that could affect the financial results of France Telecom is contained in the Document de référence submitted to the COB on March 21, 2003 and in its Form 20-F filed with the U.S. Securities and Exchange Commission. The forward-looking statements contained in this document speak only as of the date of this presentation and France Telecom does not undertake to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Broadband: a key market for FTBroadband: a key market for FT
BroadbandBroadbandTodayToday
BroadbandBroadbandTodayToday
Over 3mOver 3mlineslines
installedinstalledIn FranceIn Franceend of 03end of 03
Over 3mOver 3mlineslines
installedinstalledIn FranceIn Franceend of 03end of 03
StrongStrongleadershipleadershipfrom thefrom the
beginningbeginning
StrongStrongleadershipleadershipfrom thefrom the
beginningbeginning
2m 2m Wanadoo Wanadoo
customers customers in Europe in Europe (end of Q3)(end of Q3)
2m 2m Wanadoo Wanadoo
customers customers in Europe in Europe (end of Q3)(end of Q3)
Broadband: a key market for FTBroadband: a key market for FT
BroadbandBroadbandOpportunityOpportunity
BroadbandBroadbandOpportunityOpportunity
BetterBetterCoverageCoverage
BetterBetterCoverageCoverage
HigherHigherSpeedSpeedHigherHigherSpeedSpeed
ExpandingExpandingServicesServices
ExpandingExpandingServicesServices
450
0
50
100
150
200
250
300
350
400
1999 2000 2001 2002 2003 2004 2005
Higher SpeedHigher Speed
A constantly rising speed provided on both Fixed & Mobile
A constantly rising speed provided on both Fixed & Mobile
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
1999 2000 2001 2002 2003 2004 2005
Fixed offered bit-rateFixed offered bit-rate((kkbits/s)bits/s)
Fixed offered bit-rateFixed offered bit-rate((kkbits/s)bits/s)
Mobile Downstream / Upstreambit-rateMobile Downstream / Upstreambit-rate((kkbits/s)bits/s)
Mobile Downstream / Upstreambit-rateMobile Downstream / Upstreambit-rate((kkbits/s)bits/s)
Better CoverageBetter Coverage
Full broadband nation-wide coverage by 2005Full broadband nation-wide coverage by 2005
36%
66%74%
79%85%
90%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2001 2002 2003 2004 2005
ADSL Coverage French Market ADSL Coverage French Market ADSL Coverage French Market ADSL Coverage French Market 100% Coverage with Wifi & satellite 100% Coverage with Wifi & satellite 100% Coverage with Wifi & satellite 100% Coverage with Wifi & satellite
Satellite Satellite access access networknetwork
Satellite gatewaySatellite gateway
SatelliteSatellite
HUB
HouseholdHousehold
WiFiWiFiAccessAccessPointPoint
Expanding ServicesExpanding Services
Additional revenues based on a available & already invested network
Additional revenues based on a available & already invested network
Telephony +Telephony + Mobile +Mobile +
ImageImageInternet +Internet +
BroadbandBroadband
Personal Personal telephonytelephony
UMTSUMTSVideoVideo
TelephonyTelephony
Image Image messagingmessaging
TV onTV onADSLADSL
VODVOD
GamesGames
Image Image messagingmessaging
Photo Photo albumsalbums
Home Home networkingnetworking
VideoVideotelephonytelephony
nonnon PCPCPC,PC,
TV over DSL in France TV over DSL in France
Key customer benefits :Key customer benefits :
• Access to TPS* pay TVAccess to TPS* pay TV
• Wide choice, easy to search, order & watch TV contentsWide choice, easy to search, order & watch TV contents
• Better quality image thanks to guaranteed bit rateBetter quality image thanks to guaranteed bit rate
Key customer benefits :Key customer benefits :
• Access to TPS* pay TVAccess to TPS* pay TV
• Wide choice, easy to search, order & watch TV contentsWide choice, easy to search, order & watch TV contents
• Better quality image thanks to guaranteed bit rateBetter quality image thanks to guaranteed bit rate
Key France Telecom benefits :Key France Telecom benefits :
• Develop ARPU on consumer marketDevelop ARPU on consumer market
• Apply unique technical expertise in video technologiesApply unique technical expertise in video technologies
• No additional cabling required (standard ADSL)No additional cabling required (standard ADSL)
Key France Telecom benefits :Key France Telecom benefits :
• Develop ARPU on consumer marketDevelop ARPU on consumer market
• Apply unique technical expertise in video technologiesApply unique technical expertise in video technologies
• No additional cabling required (standard ADSL)No additional cabling required (standard ADSL)
More valueMore valuefrom samefrom samenetworksnetworks
More valueMore valuefrom samefrom samenetworksnetworks
* Non-exclusive agreement
Leverage attractive content to build up ARPULeverage attractive content to build up ARPU
Approx. 25,000 customers by end 2004Approx. 25,000 customers by end 2004Approx. 25,000 customers by end 2004Approx. 25,000 customers by end 2004
TVoDSL commercial rollout in Lyon late Dec. 2003,TVoDSL commercial rollout in Lyon late Dec. 2003,
then Paris in Q2 2004,and progressively reachthen Paris in Q2 2004,and progressively reach
in other French citiesin other French cities
TVoDSL commercial rollout in Lyon late Dec. 2003,TVoDSL commercial rollout in Lyon late Dec. 2003,
then Paris in Q2 2004,and progressively reachthen Paris in Q2 2004,and progressively reach
in other French citiesin other French cities
Develop partnerships with multiple TV content providersDevelop partnerships with multiple TV content providersDevelop partnerships with multiple TV content providersDevelop partnerships with multiple TV content providers
Target 10% of pay TV market by 2008Target 10% of pay TV market by 2008Target 10% of pay TV market by 2008Target 10% of pay TV market by 2008
ShortShort TermTermShortShort TermTerm
MediumMedium TermTerm
MediumMedium TermTerm
TV over DSL milestonesTV over DSL milestones
More valueMore valuefrom samefrom samenetworksnetworks
More valueMore valuefrom samefrom samenetworksnetworks
Fixed Line video-telephonyFixed Line video-telephony
Key customer benefits:Key customer benefits:
• Enrich the telephony experienceEnrich the telephony experience
• Enhanced environment for teleworking & groupwareEnhanced environment for teleworking & groupware
• Interoperable with mobile video-telephonyInteroperable with mobile video-telephony
Key customer benefits:Key customer benefits:
• Enrich the telephony experienceEnrich the telephony experience
• Enhanced environment for teleworking & groupwareEnhanced environment for teleworking & groupware
• Interoperable with mobile video-telephonyInteroperable with mobile video-telephony
Key France Telecom benefits:Key France Telecom benefits:
• Renewing value of telephonyRenewing value of telephony
• Leveraging IP to build up valueLeveraging IP to build up value
Key France Telecom benefits:Key France Telecom benefits:
• Renewing value of telephonyRenewing value of telephony
• Leveraging IP to build up valueLeveraging IP to build up value
Enriching the telephony experienceEnriching the telephony experience
Mobile video-telephonyMobile video-telephony
Key customer benefits:Key customer benefits:
• Attractive new communication experienceAttractive new communication experience
• Interoperability with Fixed video-telephonyInteroperability with Fixed video-telephony
• Interoperability with TV on ADSLInteroperability with TV on ADSL
Key customer benefits:Key customer benefits:
• Attractive new communication experienceAttractive new communication experience
• Interoperability with Fixed video-telephonyInteroperability with Fixed video-telephony
• Interoperability with TV on ADSLInteroperability with TV on ADSL
Key France Telecom benefits:Key France Telecom benefits:
• Building up value of communicationBuilding up value of communication
• Stimulating usageStimulating usage
• Attracting customers to more capable devicesAttracting customers to more capable devices
Key France Telecom benefits:Key France Telecom benefits:
• Building up value of communicationBuilding up value of communication
• Stimulating usageStimulating usage
• Attracting customers to more capable devicesAttracting customers to more capable devices
Personal and interoperable Personal and interoperable
More valueMore valuefrom samefrom samenetworksnetworks
More valueMore valuefrom samefrom samenetworksnetworks
Field test with 1,500 customersField test with 1,500 customersLille, Paris, ToulouseLille, Paris, Toulouse
in Q2 2004in Q2 2004
Field test with 1,500 customersField test with 1,500 customersLille, Paris, ToulouseLille, Paris, Toulouse
in Q2 2004in Q2 2004 Non-PC product launch to 15,000Non-PC product launch to 15,000 customers before end of Q2 2004customers before end of Q2 2004Non-PC product launch to 15,000Non-PC product launch to 15,000 customers before end of Q2 2004customers before end of Q2 2004
Video-telephony milestonesVideo-telephony milestones
Full-scale product launch before end 2004Full-scale product launch before end 2004Full-scale product launch before end 2004Full-scale product launch before end 2004
Interoperability between consumer Fixed video-telephony Interoperability between consumer Fixed video-telephony & UTMS video-telephony (“villes Orange”)& UTMS video-telephony (“villes Orange”)
Interoperability between consumer Fixed video-telephony Interoperability between consumer Fixed video-telephony & UTMS video-telephony (“villes Orange”)& UTMS video-telephony (“villes Orange”)
Implementation in foreignImplementation in foreign subsidiaries in 2005subsidiaries in 2005
Implementation in foreignImplementation in foreign subsidiaries in 2005subsidiaries in 2005
Interoperability between TV on ADSLInteroperability between TV on ADSL
& video-telephony by end 2005& video-telephony by end 2005
Interoperability between TV on ADSLInteroperability between TV on ADSL
& video-telephony by end 2005& video-telephony by end 2005
MobileMobileMobileMobile FixedFixedFixedFixed
Wanadoo Visio currently trialedWanadoo Visio currently trialedWanadoo Visio currently trialedWanadoo Visio currently trialed
More valueMore valuefrom samefrom samenetworksnetworks
More valueMore valuefrom samefrom samenetworksnetworks
Home networkingHome networking
Key customer benefits:Key customer benefits:
• Connecting diverse devices (PC, TV, phone, console…)Connecting diverse devices (PC, TV, phone, console…)• Sharing resourcesSharing resources• Managing home content and processesManaging home content and processes
Key customer benefits:Key customer benefits:
• Connecting diverse devices (PC, TV, phone, console…)Connecting diverse devices (PC, TV, phone, console…)• Sharing resourcesSharing resources• Managing home content and processesManaging home content and processes
Key France Telecom benefits:Key France Telecom benefits:
• Controlling network service (multi-VC, quality, reachability)Controlling network service (multi-VC, quality, reachability)• Assisting customers with their networks (self install, Assisting customers with their networks (self install, configuration, security….) and different technologiesconfiguration, security….) and different technologies• Strong relationship with vendors is necessaryStrong relationship with vendors is necessary
Key France Telecom benefits:Key France Telecom benefits:
• Controlling network service (multi-VC, quality, reachability)Controlling network service (multi-VC, quality, reachability)• Assisting customers with their networks (self install, Assisting customers with their networks (self install, configuration, security….) and different technologiesconfiguration, security….) and different technologies• Strong relationship with vendors is necessaryStrong relationship with vendors is necessary
Home gateway is key to new broadband servicesHome gateway is key to new broadband services
2003200320032003
Broadband’s milestones & commitmentsBroadband’s milestones & commitments
2004200420042004 2005 & over2005 & over2005 & over2005 & over
Q4 2003Q4 2003Q4 2003Q4 2003
Dec. 2003Dec. 2003Dec. 2003Dec. 2003
Q2 2004Q2 2004Q2 2004Q2 2004
Q2 2004Q2 2004Q2 2004Q2 2004
H2 2004H2 2004H2 2004H2 2004Q2 2004Q2 2004Q2 2004Q2 2004
End 04End 04End 04End 04
2005200520052005
End 2008End 2008End 2008End 2008
• Satellite Internet accessSatellite Internet access
• TV-over-DSL launch in LyonTV-over-DSL launch in Lyon
• 3G field test in Lille, Paris & Toulouse3G field test in Lille, Paris & Toulouse
• TV-over-DSL launch in ParisTV-over-DSL launch in Paris
• Interoperability fixed & mobile Interoperability fixed & mobile video-telephonyvideo-telephony
• Non-PC video-telephonyNon-PC video-telephony
• 3G full-scale product launch3G full-scale product launch
• Video-over-DSL in foreign Video-over-DSL in foreign subsidiaries subsidiaries
• Target of 10% of pay TVTarget of 10% of pay TV
Q4 2003Q4 2003Q4 2003Q4 2003 • Wanadoo visio trialWanadoo visio trialJun. 2003Jun. 2003Jun. 2003Jun. 2003 • WiFi home routerWiFi home router
S i m p l i c i t y d r i v e s
u s a g e
S i m p l i c i t y d r i v e s
u s a g e
Sanjiv AhujaSanjiv Ahuja
CAUTIONARY STATEMENT CAUTIONARY STATEMENT
This presentation contains forward-looking statements about France Telecom. Such statements are not historical facts and include expressions of management’s expectations about new and existing programs, opportunities, technology and market conditions. Although France Telecom believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties. These statements should not be regarded as a representation that anticipated events will occur or that expected objectives will be achieved. Important factors that could cause actual results or performance to differ materially from the results anticipated in the forward-looking statements include, among other things, the success of the announced FT 2005 plan, including the “15 + 15 + 15” plan and the TOP program, changes in economic, business and competitive markets, technological trends, France Telecom’s other strategic, financial and operating initiatives, risks and uncertainties attendant upon international operations, exchange rate fluctuations and market regulatory factors. More detailed information on the potential factors that could affect the financial results of France Telecom is contained in the Document de référence submitted to the COB on March 21, 2003 and in its Form 20-F filed with the U.S. Securities and Exchange Commission. The forward-looking statements contained in this document speak only as of the date of this presentation and France Telecom does not undertake to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
This presentation contains forward-looking statements about France Telecom. Such statements are not historical facts and include expressions of management’s expectations about new and existing programs, opportunities, technology and market conditions. Although France Telecom believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties. These statements should not be regarded as a representation that anticipated events will occur or that expected objectives will be achieved. Important factors that could cause actual results or performance to differ materially from the results anticipated in the forward-looking statements include, among other things, the success of the announced FT 2005 plan, including the “15 + 15 + 15” plan and the TOP program, changes in economic, business and competitive markets, technological trends, France Telecom’s other strategic, financial and operating initiatives, risks and uncertainties attendant upon international operations, exchange rate fluctuations and market regulatory factors. More detailed information on the potential factors that could affect the financial results of France Telecom is contained in the Document de référence submitted to the COB on March 21, 2003 and in its Form 20-F filed with the U.S. Securities and Exchange Commission. The forward-looking statements contained in this document speak only as of the date of this presentation and France Telecom does not undertake to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
A typical customer may have... A typical customer may have...
Unnecessary complexitiesUnnecessary complexities
Work emailWork email
Home emailHome email
Work voicemailWork voicemail
Home voicemailHome voicemail
Mobile voicemailMobile voicemail
Work emailWork email
Home emailHome email
Work voicemailWork voicemail
Home voicemailHome voicemail
Mobile voicemailMobile voicemail
Web services passwordsWeb services passwords
Fixed numberFixed number
Bank account pin Bank account pin numbersnumbers
Mobile phone numberMobile phone number
Car phone numberCar phone number
Web services passwordsWeb services passwords
Fixed numberFixed number
Bank account pin Bank account pin numbersnumbers
Mobile phone numberMobile phone number
Car phone numberCar phone number
What our customers say...What our customers say...
too many– Numbers– Mail boxes to check– PasswordsPasswords to remember– Key clicks to get where I want to go
...and– They find most new services confusing to use– They are confused by a variety of payment solutions– They are frustrated by a lack of interoperability
between operators, platforms,devices and services
Our customers teach us the way forwardOur customers teach us the way forward
Fragmented offeringsFragmented offerings
Introducing new services Introducing new services is hampered by is hampered by interoperability issuesinteroperability issues
Nothing is connected Nothing is connected (different networks, (different networks, platforms and devices)platforms and devices)
Fragmented offeringsFragmented offerings
Introducing new services Introducing new services is hampered by is hampered by interoperability issuesinteroperability issues
Nothing is connected Nothing is connected (different networks, (different networks, platforms and devices)platforms and devices)
Make it simpleMake it simple(simplicity drives usage)(simplicity drives usage)
IntegrationIntegration(between networks, (between networks, service providers, service providers, application developers application developers etc.) Will deliver etc.) Will deliver simplified services and simplified services and enhancements fasterenhancements faster
Make it simpleMake it simple(simplicity drives usage)(simplicity drives usage)
IntegrationIntegration(between networks, (between networks, service providers, service providers, application developers application developers etc.) Will deliver etc.) Will deliver simplified services and simplified services and enhancements fasterenhancements faster
Removing barriers to growthRemoving barriers to growth
ChallengesChallengesChallengesChallenges SolutionsSolutionsSolutionsSolutions
How to make it simple and integratedHow to make it simple and integrated
5 key areas of focus5 key areas of focus
The foundations for a coherent suite of France Telecom Group services
The foundations for a coherent suite of France Telecom Group services
Fixed servicesFixed services
Mobile servicesMobile services
Internet servicesInternet services
Identity Identity Identity Identity AuthenticationAuthenticationAuthenticationAuthentication
Payment solutionsPayment solutions
IdentityIdentityAuthentication Authentication
PresencePresence
ReachabilityReachability
Contacts listContacts list
IdentityIdentity
One secure password access to all servicesOne secure password access to all servicesOne secure password access to all servicesOne secure password access to all services
Consistent and personalised interface across all devices Access rights management Ability to sign a transaction Secure access to business services and corporate
intranet Interoperability across networks/operators Open solution (liberty alliance) Single-sign-on for all FT group portals in France: Q2 2004 Become a trusted ID provider for third parties by 2005
Personalization and securityPersonalization and security
Too many passwordsToo many passwordsToo many passwordsToo many passwords
One number, one mailbox, be in contact, One number, one mailbox, be in contact, be connected … anywhere with one devicebe connected … anywhere with one deviceOne number, one mailbox, be in contact, One number, one mailbox, be in contact,
be connected … anywhere with one devicebe connected … anywhere with one device
ReachReach
Integrated instant messaging and email alerts: 2004 Seamless management of fixed and mobile voicemails:
Q3 2004 Wireless ADSL gateway able to communicate with mobile
phones, with automatic call forwarding when called party is away from home: Q4 2004
Mobile to fixed call forwarding when called party is at home: 2005
Interoperabiliy for seamless servicesInteroperabiliy for seamless services
Too many phone numbers, too many mailboxes,Too many phone numbers, too many mailboxes,too many unconnected ways to communicatetoo many unconnected ways to communicate
Too many phone numbers, too many mailboxes,Too many phone numbers, too many mailboxes,too many unconnected ways to communicatetoo many unconnected ways to communicate
My personal contact list accessible through the network My personal contact list accessible through the network to any device, any location, anytimeto any device, any location, anytime
My personal contact list accessible through the network My personal contact list accessible through the network to any device, any location, anytimeto any device, any location, anytime
Contact lists everywhereContact lists everywhere(one in my computer, one in my home phone, (one in my computer, one in my home phone,
one in my mobile…)one in my mobile…)
Contact lists everywhereContact lists everywhere(one in my computer, one in my home phone, (one in my computer, one in my home phone,
one in my mobile…)one in my mobile…)
Contact listContact list
Orange BackupBackup launched 2002 Orange UK single contact list launched 2003 Fixed line (France): H1 2004 with new terminals or voice
access Wanadoo single contact list: H1 2004 Universal contact list: 2005
Orange BackupBackup launched 2002 Orange UK single contact list launched 2003 Fixed line (France): H1 2004 with new terminals or voice
access Wanadoo single contact list: H1 2004 Universal contact list: 2005
A Complex InfrastructureA Complex Infrastructure
Orange BackupOrange Backup
Never lose your personal information
Everything is backed up on the Orange network
I want to know with whom in my personal community I can
communicate with
PresencePresence
Full instant messaging with voice and video on Wanadoo portal in H1 2004
France telecom employees using instant messaging beginning of H1 2004
Orange and Wanadoo interoperability in H2 2004
Presence based contact list on the internet in 2005
Full instant messaging with voice and video on Wanadoo portal in H1 2004
France telecom employees using instant messaging beginning of H1 2004
Orange and Wanadoo interoperability in H2 2004
Presence based contact list on the internet in 2005
Leveraging intelligence in the networkLeveraging intelligence in the network
Always know who’s online and available
Simple online payment solutionsSimple online payment solutionsSimple online payment solutionsSimple online payment solutions
I want a simple way to purchase itemsI want a simple way to purchase itemsI want a simple way to purchase itemsI want a simple way to purchase items
PaymentPayment
Capability to send out millions of bills and collect small amounts Sourcing of “best-of-breed” software platforms (kenan, portal, IPIN) Real-time account management and on-line purchase authorisation
on all networks Reputation with content providers inherited from Teletel and
Audiotel Single merchant kit for fixed, mobile and internet Q3 2004 Large scale deployment of content billing for m-commerce Q4 2004
Trusted, standardised and open Trusted, standardised and open
PaymentPayment
Trusted, standardised and openTrusted, standardised and open
CarrierEnd user
ServiceProvider
2003200320032003
Ease of use milestones & commitmentsEase of use milestones & commitments
2004200420042004 2005 & over2005 & over2005 & over2005 & over
Q2 2003Q2 2003Q2 2003Q2 2003
H1 2004H1 2004H1 2004H1 2004
H1 2004H1 2004 H1 2004H1 2004
H2 2004H2 2004H2 2004H2 2004
H2 2005H2 2005H2 2005H2 2005
Q3 2004Q3 2004Q3 2004Q3 2004
• Single Sign On (SSO) for FT group portalsSingle Sign On (SSO) for FT group portals
• W-HA Common payment indentifierW-HA Common payment indentifier
• Orange contact list in UKOrange contact list in UK
• Single contact list for fixed and WanadooSingle contact list for fixed and Wanadoo• Voice and video on Wanadoo’Voice and video on Wanadoo’
Instant MessagingInstant Messaging
• Full interoperable contacts listFull interoperable contacts list
• Wanadoo-Orange IM interoperabilityWanadoo-Orange IM interoperability
• Presence-based contact list Presence-based contact list
• Seamless fixed, mobile voice mails Seamless fixed, mobile voice mails
• Automatic call forwarding fixed-to-mobileAutomatic call forwarding fixed-to-mobile
Q2 2004Q2 2004Q2 2004Q2 2004
Q3 2004Q3 2004Q3 2004Q3 2004
H1 2005H1 2005H1 2005H1 2005
H1 2005H1 2005H1 2005H1 2005 • Mobile-to-fixed call forwardingMobile-to-fixed call forwarding
• Single merchant kitSingle merchant kit
• Large scale deployment of paymentLarge scale deployment of payment
Q3 2004Q3 2004Q3 2004Q3 2004
Q4 2004Q4 2004Q4 2004Q4 2004
H2 2005H2 2005H2 2005H2 2005 • Trusted ID providerTrusted ID provider
Q4 2004Q4 2004Q4 2004Q4 2004
C o r p o r a t eS o l u t i o n sC o r p o r a t eS o l u t i o n s
Barbara DalibardBarbara Dalibard
CAUTIONARY STATEMENT CAUTIONARY STATEMENT
This presentation contains forward-looking statements about France Telecom. Such statements are not historical facts and include expressions of management’s expectations about new and existing programs, opportunities, technology and market conditions. Although France Telecom believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties. These statements should not be regarded as a representation that anticipated events will occur or that expected objectives will be achieved. Important factors that could cause actual results or performance to differ materially from the results anticipated in the forward-looking statements include, among other things, the success of the announced FT 2005 plan, including the “15 + 15 + 15” plan and the TOP program, changes in economic, business and competitive markets, technological trends, France Telecom’s other strategic, financial and operating initiatives, risks and uncertainties attendant upon international operations, exchange rate fluctuations and market regulatory factors. More detailed information on the potential factors that could affect the financial results of France Telecom is contained in the Document de référence submitted to the COB on March 21, 2003 and in its Form 20-F filed with the U.S. Securities and Exchange Commission. The forward-looking statements contained in this document speak only as of the date of this presentation and France Telecom does not undertake to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
This presentation contains forward-looking statements about France Telecom. Such statements are not historical facts and include expressions of management’s expectations about new and existing programs, opportunities, technology and market conditions. Although France Telecom believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties. These statements should not be regarded as a representation that anticipated events will occur or that expected objectives will be achieved. Important factors that could cause actual results or performance to differ materially from the results anticipated in the forward-looking statements include, among other things, the success of the announced FT 2005 plan, including the “15 + 15 + 15” plan and the TOP program, changes in economic, business and competitive markets, technological trends, France Telecom’s other strategic, financial and operating initiatives, risks and uncertainties attendant upon international operations, exchange rate fluctuations and market regulatory factors. More detailed information on the potential factors that could affect the financial results of France Telecom is contained in the Document de référence submitted to the COB on March 21, 2003 and in its Form 20-F filed with the U.S. Securities and Exchange Commission. The forward-looking statements contained in this document speak only as of the date of this presentation and France Telecom does not undertake to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Towards open networks shared with partnersTowards open networks shared with partners
Evolution of corporate customer infrastructureEvolution of corporate customer infrastructure
IP & Ethernet IP & Ethernet Multi networkMulti network
accessaccess
IP & Ethernet IP & Ethernet Multi networkMulti network
accessaccess
Toward an integrated network Toward an integrated network
IP SECIP SECXDSLXDSLWIFIWIFIVOIPVOIP
IP SECIP SECXDSLXDSLWIFIWIFIVOIPVOIP
19801980 19901990 19951995 2003200320002000 TomorrowTomorrow
IP VPNIP VPNMPLSMPLS
Voice VPNVoice VPN
IP VPNIP VPNMPLSMPLS
Voice VPNVoice VPN
Frame RelayFrame RelayATMATMISDNISDN
Frame RelayFrame RelayATMATMISDNISDN
Star networks,Star networks,Leased linesLeased lines
X25X25PSTNPSTN
Star networks,Star networks,Leased linesLeased lines
X25X25PSTNPSTN
Distributed Distributed computingcomputing
Multi-deviceMulti-device
Distributed Distributed computingcomputing
Multi-deviceMulti-device
IT evolutionIT evolution
19801980 19901990 19951995 2003200320002000
3 tier web3 tier webarchitecturesarchitectures
3 tier web3 tier webarchitecturesarchitecturesClient serverClient serverClient serverClient server
TomorrowTomorrow
Centralised ISCentralised ISCentralised ISCentralised IS
Business trendsBusiness trends
Employees are a key asset of Customer centric organisations and need efficient communication
Developing managed and integrated communication services
Developing managed and integrated communication services
NomadismNomadismNomadismNomadism
After optimisation, businesses want to take advantage of new technologies with simple and integrated solutions
Integration and outsourcing Integration and outsourcing of communication servicesof communication servicesIntegration and outsourcing Integration and outsourcing of communication servicesof communication services
Nomadism: market trendsNomadism: market trends
8 out of 10 employees are mobile within their company8 out of 10 employees are mobile within their company 3 out of 10 are mobile outside the company3 out of 10 are mobile outside the company Up to 60% of businesses have started an IT mobility project, Up to 60% of businesses have started an IT mobility project,
and 37% of CIOs consider that it is strategic to their businessand 37% of CIOs consider that it is strategic to their business
Source: IDC/Orange 12/2002
What applications do employees need? What applications do employees need?
Our customers expect to be connectedanywhere, anytime, from any device
Our customers expect to be connectedanywhere, anytime, from any device
0 10 20 30 40 50 60 70 80 90 100
NSP
Accès fax
File Transfer
Internet Access
Intranet / Applications accesses
Email Access 75.0%75.0%
60.4%60.4%
39.4%39.4%
35.4%35.4%
16.7%16.7%
4.2%4.2%
55%
44%
27%
23%
21%
15%
9%
9%
6%
3%
74%
94%the office
home
another site in the company
a hotel room
abroad
customers and suppliers
a tradeshow, a congress, an event
an airport
a train
a train station
another location
a restaurant
Nomadism: France Telecom leadershipNomadism: France Telecom leadershipAre you used to surfing on the Internet,
sending or receiving emails,accessing to intranet or local company applications from …
Are you used to surfing on the Internet,sending or receiving emails,
accessing to intranet or local company applications from …
Source: Panel Orange DME / User survey July 2003 / Base 113
Excellence in coverage, technology and service,proven track record in security and ease of useExcellence in coverage, technology and service,proven track record in security and ease of use
Oleane, EquantOleane, EquantOleane, EquantOleane, Equant
WanadooWanadooWanadooWanadoo
OrangeOrangeOrangeOrange
Nomadism: our propositionNomadism: our proposition
Offer employees on the move, whatever the Offer employees on the move, whatever the network and device, the set of services they neednetwork and device, the set of services they need– ““User friendliness”: connection kit, single sign-on…User friendliness”: connection kit, single sign-on…– End-to-end securityEnd-to-end security– Integrated customer careIntegrated customer care
Developed in partnership with key clientsDeveloped in partnership with key clients
First market to launch: FranceFirst market to launch: France– 1,7 million blue collars1,7 million blue collars– 2,6 million white collars / professionals2,6 million white collars / professionals
A France Telecom Group wide projectA France Telecom Group wide project
Nomadism: a segmented offerNomadism: a segmented offer
Solution for professionalsSolution for professionals
– Access through Wanadoo and Orange to Wanadoo Mail Access through Wanadoo and Orange to Wanadoo Mail and Portal using SSL securityand Portal using SSL security
Solution for SMEsSolution for SMEs
– Access through Oleane and Orange to Oleane Mail, Portal Access through Oleane and Orange to Oleane Mail, Portal and Business Services using IPSEC securityand Business Services using IPSEC security
Solution for CorporatesSolution for Corporates
– Access via Equant IP VPN, Orange and Wanadoo to Access via Equant IP VPN, Orange and Wanadoo to Equant Mail and to corporate Intranet through security Equant Mail and to corporate Intranet through security (IPSEC, MPLS) and corporate authentication services(IPSEC, MPLS) and corporate authentication services
Coverage, Technology, Service, Security, SimplicityCoverage, Technology, Service, Security, Simplicity
VOIP, IPBX, IP centrex, WLANVOIP, IPBX, IP centrex, WLAN
Single voice and data networksSingle voice and data networks
Desktop to desktop multimedia Desktop to desktop multimedia streams to managestreams to manage
VOIP, IPBX, IP centrex, WLANVOIP, IPBX, IP centrex, WLAN
Single voice and data networksSingle voice and data networks
Desktop to desktop multimedia Desktop to desktop multimedia streams to managestreams to manage
Customers need help to manage a major transitionCustomers need help to manage a major transition
POTS, PBX, LANPOTS, PBX, LAN
Separate voice and data Separate voice and data networksnetworks
Building to building Building to building network engineeringnetwork engineering
POTS, PBX, LANPOTS, PBX, LAN
Separate voice and data Separate voice and data networksnetworks
Building to building Building to building network engineeringnetwork engineering
Businesses encounter major technology changesBusinesses encounter major technology changes
IT&C infrastructure management:Customer challenges
IT&C infrastructure management:Customer challenges
IT&C infrastructure management:Simplifying the landscapeIT&C infrastructure management:Simplifying the landscape
PracticesPractices– Plan: Consulting, application/network performance analysisPlan: Consulting, application/network performance analysis
– Build: project management, deployment (including equipment supply)Build: project management, deployment (including equipment supply)
– Run: ORun: Operation, maintenance, user and telecom manager assistanceperation, maintenance, user and telecom manager assistance
TechnologiesTechnologies– Telephony: PBX, IPBX, IP centrexTelephony: PBX, IPBX, IP centrex
– LAN, MAN: infrastructures, servers, cabling and WLANLAN, MAN: infrastructures, servers, cabling and WLAN
– Messaging: MS Exchange, Lotus NotesMessaging: MS Exchange, Lotus Notes
– Servers: Unix, Linux, Windows, JEE, .NETServers: Unix, Linux, Windows, JEE, .NET
– Security: firewalls, antivirus, antispam, intrusion detection, IP SECSecurity: firewalls, antivirus, antispam, intrusion detection, IP SEC
Simplifying the technological transitionSimplifying the technological transition
IT & C infrastructure management: IP Voice services
IT & C infrastructure management: IP Voice services
TechnologyTechnologyTechnologyTechnology Customer benefitsCustomer benefitsCustomer benefitsCustomer benefits
Advanced servicesAdvanced servicesAdvanced servicesAdvanced servicesIP-enabled
call centers
IP PBX IP Centrex
Easy and enhanced re-Easy and enhanced re-distribution of incoming callsdistribution of incoming calls– Calls transferred to tele-Calls transferred to tele-
workersworkers– "click to call", web request"click to call", web request
Basic telephonyBasic telephonyservicesservices
Basic telephonyBasic telephonyservicesservices
Cost of on-net trafficCost of on-net traffic Cost of management and Cost of management and
change change Cost of cablingCost of cabling
Call managementCall managementCall managementCall management Unified messagingComputer-telephony
integration
Easy integration of VoIP with Easy integration of VoIP with applications such as e-mail applications such as e-mail and IM ; unified messagingand IM ; unified messaging
Simple computer telephony Simple computer telephony integrationintegration
IP enables value-added services IP enables value-added services
IT & C infrastructure management : Security services
IT & C infrastructure management : Security services Consulting, AssessmentsConsulting, Assessments
Comprehensive Services portfolio, from single firewall Comprehensive Services portfolio, from single firewall management to complete security out-taskingmanagement to complete security out-tasking– Internet access protectionInternet access protection
– Intranet segmentationIntranet segmentation
– Remote access securisationRemote access securisation
– Intrusion detection, antispam, anti-virus…Intrusion detection, antispam, anti-virus…
We partner with leading vendorsWe partner with leading vendors
We protect the NetworkWe protect the Network
IT&C infrastructure management: CPEs and servers managementIT&C infrastructure management: CPEs and servers management
Presence Equant international coverage French presence (over 1000 field technicians serving our customers)
R&D and technology expertise IPBX, IP centrex, WLAN, IP SEC
Service level commitment extended to end usersService level commitment extended to end users
Up and running business unitsUp and running business units Over 700 M€ revenues with Over 700 M€ revenues with
external customersexternal customers Management ofManagement of
– 800+ firewalls,800+ firewalls,– 800 000+ mailboxes,800 000+ mailboxes,– 2500+ servers2500+ servers
Ex: Number of managed LAN portsEx: Number of managed LAN ports
15 000 15 000 15 000
7 300
49 400
113 400
2001 2002 2003
External customers
France Telecom
Communications Outsourcing: MarketCommunications Outsourcing: Market
ED
SE
DS
Geo coverage
Fixed telecom Fixed telecom networksnetworks
Infrastructure ITInfrastructure IT
Application Application ManagementManagement
AT
&T
AT
&T
CS
CC
SC
FT
/ E
qu
ant
FT
/ E
qu
ant
Wo
rld
Co
mW
orl
dC
om
Acc
entu
reA
ccen
ture
Info
net
Info
net
International(multi-regional)RegionalNational
Na
tio
na
l T
elc
os
Na
tio
na
l T
elc
os
IBM
IB
M
Ato
s O
rig
inA
tos
Ori
gin
CG
E&
YC
GE
&Y
BT
BT
Kin
d o
f o
uts
ou
rcin
g
C&
WC
&W
Key Players and Segment in target marketKey Players and Segment in target marketKey Players and Segment in target marketKey Players and Segment in target market
Mobile telecom Mobile telecom networksnetworks
Communications Outsourcing: benefitsCommunications Outsourcing: benefits Customer expectations: creating value
– Reduce costs and increase flexibility– Secure business critical applications– Reduce cycles to implement core business
operations– Manage fewer contracts and suppliers
France Telecom expectations– Immediate increase of revenues (x2 to x5 for
existing customers)– Establishing long-term customer loyalty
• 3 to 8 years contracts• 85% of deals are renewed
Eur 200 Mn / year today, estimated market of Eur 2.5 Bn and growing
Eur 200 Mn / year today, estimated market of Eur 2.5 Bn and growing
Ability to execute & integrateAbility to execute & integrateAbility to execute & integrateAbility to execute & integrate
MoreMoreServicesServices
MoreMoreServicesServices
Corporate solutions: opportunityCorporate solutions: opportunity
CommunicationCommunicationExpertiseExpertiseIncludingIncludingMobile &Mobile &InternetInternet
CommunicationCommunicationExpertiseExpertiseIncludingIncludingMobile &Mobile &InternetInternet
GlobalGlobalReachReachGlobalGlobalReachReach
The business is changingThe business is changing
2003200320032003
Corporate Solutions’ milestones & commitmentsCorporate Solutions’ milestones & commitments
2004200420042004 2005 & over2005 & over2005 & over2005 & over
Q4 2003Q4 2003Q4 2003Q4 2003
Q1 2004Q1 2004 Q1 2004Q1 2004
Q3 2004Q3 2004Q3 2004Q3 2004
H1 2004H1 2004H1 2004H1 2004
• Convergence of voice VPN and IP VPNConvergence of voice VPN and IP VPN
• 1000 wifi hotspots1000 wifi hotspots
• Integrated nomadism offers for SME & Integrated nomadism offers for SME & enterprises in Franceenterprises in France
• Similar services by FT subsidiaries Similar services by FT subsidiaries abroadabroad
• Nomadism offers available in the UKNomadism offers available in the UK
• IP centrex offer launch IP centrex offer launch
• Business continuity solutionsBusiness continuity solutions(security data center)(security data center)
Q3 2004Q3 2004Q3 2004Q3 2004
H1 2005H1 2005H1 2005H1 2005
• Nomadism offers available for Equant Nomadism offers available for Equant customerscustomers
Q3 2004Q3 2004Q3 2004Q3 2004
H1 2005H1 2005H1 2005H1 2005 • Nomadism solutions extended to voiceNomadism solutions extended to voice and IM and IM
Q4 2004Q4 2004Q4 2004Q4 2004
Q4 2003Q4 2003Q4 2003Q4 2003 • Partnership with Accor, AF,…Partnership with Accor, AF,…
Q4 2003Q4 2003Q4 2003Q4 2003 • Larger salesforce dedicated to IT & C Larger salesforce dedicated to IT & C infrastructure servicesinfrastructure services
P a r t n e r s h i p sa n d g r o w t h
P a r t n e r s h i p sa n d g r o w t h
Didier LombardDidier Lombard
CAUTIONARY STATEMENT CAUTIONARY STATEMENT
This presentation contains forward-looking statements about France Telecom. Such statements are not historical facts and include expressions of management’s expectations about new and existing programs, opportunities, technology and market conditions. Although France Telecom believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties. These statements should not be regarded as a representation that anticipated events will occur or that expected objectives will be achieved. Important factors that could cause actual results or performance to differ materially from the results anticipated in the forward-looking statements include, among other things, the success of the announced FT 2005 plan, including the “15 + 15 + 15” plan and the TOP program, changes in economic, business and competitive markets, technological trends, France Telecom’s other strategic, financial and operating initiatives, risks and uncertainties attendant upon international operations, exchange rate fluctuations and market regulatory factors. More detailed information on the potential factors that could affect the financial results of France Telecom is contained in the Document de référence submitted to the COB on March 21, 2003 and in its Form 20-F filed with the U.S. Securities and Exchange Commission. The forward-looking statements contained in this document speak only as of the date of this presentation and France Telecom does not undertake to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
This presentation contains forward-looking statements about France Telecom. Such statements are not historical facts and include expressions of management’s expectations about new and existing programs, opportunities, technology and market conditions. Although France Telecom believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties. These statements should not be regarded as a representation that anticipated events will occur or that expected objectives will be achieved. Important factors that could cause actual results or performance to differ materially from the results anticipated in the forward-looking statements include, among other things, the success of the announced FT 2005 plan, including the “15 + 15 + 15” plan and the TOP program, changes in economic, business and competitive markets, technological trends, France Telecom’s other strategic, financial and operating initiatives, risks and uncertainties attendant upon international operations, exchange rate fluctuations and market regulatory factors. More detailed information on the potential factors that could affect the financial results of France Telecom is contained in the Document de référence submitted to the COB on March 21, 2003 and in its Form 20-F filed with the U.S. Securities and Exchange Commission. The forward-looking statements contained in this document speak only as of the date of this presentation and France Telecom does not undertake to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Telecom services involve integration of many elementsTelecom services involve integration of many elements
FT to focus on customer experience and service innovation
FT to focus on customer experience and service innovation
CustomerCustomer
PartnersPartners
ITITSystemsSystems
Network Network equipmentsequipments
TerminalsTerminals
ContentsContents
Distribution Distribution channelschannels
Equipment manufacturersEquipment manufacturers
Software developpersSoftware developpersDistribution & othersDistribution & others
Content editorsContent editors
France Telecom ambition with partnersFrance Telecom ambition with partners
A win-win operation that saves time and moneyA win-win operation that saves time and money
France Telecom intend to deliver services, and not France Telecom intend to deliver services, and not only connectivity to customersonly connectivity to customers
France Telecom want to focus on service France Telecom want to focus on service integration and innovation, not on manufacturing or integration and innovation, not on manufacturing or content editingcontent editing
France Telecom will rely on skilled and experienced France Telecom will rely on skilled and experienced players to foster the development of new services players to foster the development of new services and be ahead on the marketand be ahead on the market
Rebalance relationship between operators and manufacturersRebalance relationship between operators and manufacturers
Equipement and terminal vendors were selling to a limited number of operators, which had a large control of R&D priorities and funding:
+ Shared vision of future services
+ Joint efforts for innovation
- Too many local standardisations
- Higher costs
The “arsenal” model The “arsenal” model
1 – situation in the 80’s1 – situation in the 80’s1 – situation in the 80’s1 – situation in the 80’s
Rebalance relationship between operators and partnersRebalance relationship between operators and partners
Equipment manufacturers became global and invested more in R&D
Operators relied on regular sourcing for their terminal and equipment needs and invested less in R&D:
+ de facto global standardisation
+ lower costs (R&D depreciation over larger volumes)
- less service innovation (R&D far from end user customers)
- less ability for operators to differentiate
The “utility” modelThe “utility” model
2 – situation from the 90’s to now2 – situation from the 90’s to now2 – situation from the 90’s to now2 – situation from the 90’s to now
Rebalance relationship between operators and partnersRebalance relationship between operators and partners
Common work, with joint teams in same locations (but no permanent JV) to be ahead of competition
Limited period of exclusivity, in order to leverage usage through generalization
Strong link with sourcing policy, to keep costs as low as possible
Mutualisation of vision, R&D funding and risks
The “partnership” modelThe “partnership” model
3 – France Telecom strategy3 – France Telecom strategy
Major milestonesMajor milestones
Dedicated organisation at corporate level
First steps:
• with Nortel, Alcatel and Nokia on 3G mobiles services,
• with Microsoft and Handspring for smartphones,
• with TPS/TF1 for TV on ADSL,
• with Sony to connect games consoles through ADSL
• with many technology suppliers to build new architectures and anticipate development of new services (Liberty Alliance, Jabber, …)
Comprehensive negotiations in progress, in order to announce Tier 1 partners by end of 2003
Partnerships to foster FT competitive edgePartnerships to foster FT competitive edge
T e c h n o l o g y& C o n v e r g e n c e
T e c h n o l o g y& C o n v e r g e n c e
Networks Networks Jean-Philipe Jean-Philipe VanotVanot
ITIT Jean-Paul CottetJean-Paul Cottet Roadmap to convergenceRoadmap to convergence Sanjiv AhujaSanjiv Ahuja SourcingSourcing Louis-Pierre Louis-Pierre
WenesWenes ConclusionConclusion Sanjiv AhujaSanjiv Ahuja
CAUTIONARY STATEMENT CAUTIONARY STATEMENT
This presentation contains forward-looking statements about France Telecom. Such statements are not historical facts and include expressions of management’s expectations about new and existing programs, opportunities, technology and market conditions. Although France Telecom believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties. These statements should not be regarded as a representation that anticipated events will occur or that expected objectives will be achieved. Important factors that could cause actual results or performance to differ materially from the results anticipated in the forward-looking statements include, among other things, the success of the announced FT 2005 plan, including the “15 + 15 + 15” plan and the TOP program, changes in economic, business and competitive markets, technological trends, France Telecom’s other strategic, financial and operating initiatives, risks and uncertainties attendant upon international operations, exchange rate fluctuations and market regulatory factors. More detailed information on the potential factors that could affect the financial results of France Telecom is contained in the Document de référence submitted to the COB on March 21, 2003 and in its Form 20-F filed with the U.S. Securities and Exchange Commission. The forward-looking statements contained in this document speak only as of the date of this presentation and France Telecom does not undertake to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
This presentation contains forward-looking statements about France Telecom. Such statements are not historical facts and include expressions of management’s expectations about new and existing programs, opportunities, technology and market conditions. Although France Telecom believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties. These statements should not be regarded as a representation that anticipated events will occur or that expected objectives will be achieved. Important factors that could cause actual results or performance to differ materially from the results anticipated in the forward-looking statements include, among other things, the success of the announced FT 2005 plan, including the “15 + 15 + 15” plan and the TOP program, changes in economic, business and competitive markets, technological trends, France Telecom’s other strategic, financial and operating initiatives, risks and uncertainties attendant upon international operations, exchange rate fluctuations and market regulatory factors. More detailed information on the potential factors that could affect the financial results of France Telecom is contained in the Document de référence submitted to the COB on March 21, 2003 and in its Form 20-F filed with the U.S. Securities and Exchange Commission. The forward-looking statements contained in this document speak only as of the date of this presentation and France Telecom does not undertake to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
N e t w o r k s c o n t r i b u t i n g
t o t h e c o s t r e d u c t i o n
a n d g r o w t h p r o g r a m s
N e t w o r k s c o n t r i b u t i n g
t o t h e c o s t r e d u c t i o n
a n d g r o w t h p r o g r a m sJean-Philippe
VanotJean-Philippe
Vanot
Orange Access Network stateOrange Access Network state
Orange Access built on state of the art equipment that allow:Orange Access built on state of the art equipment that allow:– Evolutivity: largely compatible with new functions providing speech quality Evolutivity: largely compatible with new functions providing speech quality
and capacity increase (new voice codecs AMR + half rate) and data and capacity increase (new voice codecs AMR + half rate) and data throughput increase (new codings CS3/CS4, +50% over GPRS)throughput increase (new codings CS3/CS4, +50% over GPRS)
– Network quality and stability consistent across every Orange network, Network quality and stability consistent across every Orange network, monitored by high quality survey.monitored by high quality survey.
– Reduction of CAPEX and OPEX for UMTS due to GSM/UMTS co-siting Reduction of CAPEX and OPEX for UMTS due to GSM/UMTS co-siting and transport mutualisationand transport mutualisation
SGSN GGSN
Intranet
Internet
HLR
MSC
Network sub-system
BTS
BTS
BSCBTS
BTS
BSC
Radio sub-system
Mature GSM/GPRS Access Network ; sites are massively re-used for UMTS
Mature GSM/GPRS Access Network ; sites are massively re-used for UMTS
Orange Core Network stateOrange Core Network state
Orange Core Network built on very recent equipmentsOrange Core Network built on very recent equipments(less than 5-7 years old) which allow:(less than 5-7 years old) which allow:– Evolutivity: evolution towards UMTS without huge technology evolution Evolutivity: evolution towards UMTS without huge technology evolution
and little impact on operation teamsand little impact on operation teams– Scalability: cope with subscriber and traffic increase.Scalability: cope with subscriber and traffic increase.– Operability is under control: huge skills and experience shared across Operability is under control: huge skills and experience shared across
Orange Networks Orange Networks – Orange Backbone will be mutualised for GSM and UMTSOrange Backbone will be mutualised for GSM and UMTS
SGSN GGSN
Intranet
Internet
HLR
MSC
Network sub-system
BTS
BTS
BSCBTS
BTS
BSC
Radio sub-system
Smooth evolution of Core Network from GSM/GPRS to UMTS
Smooth evolution of Core Network from GSM/GPRS to UMTS
Copper Local LoopCopper Local Loop High availability: e.g. 4.2 failures /100 main lines /yearHigh availability: e.g. 4.2 failures /100 main lines /year About 95 % of lines are technically "adsl-capable" at 512 kbps rate after About 95 % of lines are technically "adsl-capable" at 512 kbps rate after
installation of DSLAMinstallation of DSLAM About 60 % of lines (more in dense areas) for video services at 6 Mbps rateAbout 60 % of lines (more in dense areas) for video services at 6 Mbps rate
Customers reached
Benchmark IEEE 2001
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 km
USA
France
6 Mbps6 Mbps
512 kbps512 kbps
France Telecom Copper local loop is a strong asset for broadband
France Telecom Copper local loop is a strong asset for broadband
Copper Access Network StrategyCopper Access Network Strategy Achieve 90 % ADSL natiowide coverage by 2005 in FranceAchieve 90 % ADSL natiowide coverage by 2005 in France
Automated provisioning of mass market customer accesses: Automated provisioning of mass market customer accesses: – in 2.4 days including « jumper connecting » (less than 90 minutes for in 2.4 days including « jumper connecting » (less than 90 minutes for
order processing and network configuration through management tools)order processing and network configuration through management tools)– provisioning capacity as of December 2002: 27,000 orders per dayprovisioning capacity as of December 2002: 27,000 orders per day
Enhance service offering based on multi-service ADSL Enhance service offering based on multi-service ADSL – first step: launch of TV on ADSL (Lyon, end of 2003)first step: launch of TV on ADSL (Lyon, end of 2003)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2001 2002 2003 2004 20050
1000
2000
3000
4000
5000
6000
7000
Percentage of coverage Number of DSLAM-equipped sites
Extensive coverage and multimedia offerExtensive coverage and multimedia offer
Capex has significantly fallen Capex has significantly fallen
DSLAM price on Q1 2001 basisDSLAM price on Q1 2001 basisDSLAM price on Q1 2001 basisDSLAM price on Q1 2001 basis
Estimate for Q4 2003
Quality has significantly increasedQuality has significantly increased
DSL services QoS*DSL services QoS*DSL services QoS*DSL services QoS*
ADSLADSL
(*) DSLAM+ATM+BAS
Availability (%)
99,998
99,880
99,900
99,920
99,940
99,960
99,980
100,000
2000 2001 2002 2003 2004
ADSL France Telecom PSTN
Estimate for 2003 & 2004
0
20
40
60
80
100
Q1
2001
Q4
2001
Q3
2002
Q2
2003
Decreasing costs while increasing qualityDecreasing costs while increasing quality
Optical access network for Corporates Optical access network for Corporates
Nearly 10,000 Large Corporate fiber optic connectionsNearly 10,000 Large Corporate fiber optic connections Increasing bit rates: Increasing bit rates:
– From Multilan/Interlan 2.0, over ATM -> 150 Mbps From Multilan/Interlan 2.0, over ATM -> 150 Mbps – To SMHD Giga, based on WDM rings -> 32 x 2.5 GbpsTo SMHD Giga, based on WDM rings -> 32 x 2.5 Gbps
Enhancement of service offering and cost optimization: Gigabit-EthernetEnhancement of service offering and cost optimization: Gigabit-Ethernet– Pilot network in Ile de France: Ethernet MAN Pilot network in Ile de France: Ethernet MAN
-> interconnection of LANs up to 1 Gbps, shared between customers, supporting-> interconnection of LANs up to 1 Gbps, shared between customers, supporting Ethernet Switched Service Ethernet Switched Service
Number of fiber optic connected Corporate SitesNumber of fiber optic connected Corporate Sites
0
2000
4000
6000
8000
10000
12000
14000
16000
YE 2001 YE 2002 YE 2003 YE 2004 YE 2005
Dense fiber capillarity and Enhancement of services based on Ethernet
Dense fiber capillarity and Enhancement of services based on Ethernet
0
10
20
30
40
50
60
70
YE 2001 mid-2002 YE 2002 mid-2003
Core and aggregation network evolutionsCore and aggregation network evolutions National IP Backbone:
total carried bit rate (Gbps)National IP Backbone:
total carried bit rate (Gbps)
IP: innovative architecture and features
Reliability (duplication, protection)
Provision of MPLS-based carrier-VPN service
IPV6 capability within a part of the international network
IP: innovative architecture and features
Reliability (duplication, protection)
Provision of MPLS-based carrier-VPN service
IPV6 capability within a part of the international network
Reliable and steadily growing IP MPLS core backboneReliable and steadily growing IP MPLS core backbone
ATM: benefiting from last technological innovations
High capacity switches, high bit rate interfaces
Use of statistical technics, Gigabit Ethernet capabilities
ATM: benefiting from last technological innovations
High capacity switches, high bit rate interfaces
Use of statistical technics, Gigabit Ethernet capabilities
Transmission core networkTransmission core network
Evolution of capacities and investment costs of WDM systemsEvolution of capacities and investment costs of WDM systems
To
tal
Ca
pa
cit
y o
f W
DM
sy
ste
ms
(G
bp
s)
To
tal
Ca
pa
cit
y o
f W
DM
sy
ste
ms
(G
bp
s)
Co
st
of
ca
rrie
d G
iga
bit
(re
f. E
oy
19
97
)C
os
t o
f c
arr
ied
Gig
ab
it (
ref.
Eo
y 1
99
7)
Drop in transmission costs: divided by 4 on 4 year-period
100100
3737
2222
1818
0
500
1000
1500
2000
2500
3000
3500
4000
4500
YE 1997 1999 2001 2003 future0
20
40
60
80
100
120
EBN EBN EBN EBN
NABN NABN NABN NABN
8x2,5G8x2,5G
40x10G40x10G
80x10G80x10G
32x2,5G32x2,5G
100x40G100x40G
Decreasing costs while increasing capacitiesDecreasing costs while increasing capacities
N&C Division's efficiency: CAPEX evolutionN&C Division's efficiency: CAPEX evolution
Big cost-savings resulting from:Big cost-savings resulting from:
TOP CAPEX chantiersTOP CAPEX chantierse.g. investment processe.g. investment process
TOP CAPEX chantiersTOP CAPEX chantierse.g. investment processe.g. investment process
TOP sourcing programTOP sourcing programTOP sourcing programTOP sourcing program
Technological progressTechnological progressTechnological progressTechnological progress
33%37%37%Common Resources Common Resources & other& other
6%13%13%PSTNPSTN
25%20%20%x-DSL + DSL-eligibility x-DSL + DSL-eligibility increase + ATM + IPincrease + ATM + IP
36%36%30%30%Local LoopLocal Loop
% N&C % N&C Division's capexDivision's capex
% N&C % N&C Division's capexDivision's capex
PSTN: no more extensionPSTN: no more extensionPSTN: no more extensionPSTN: no more extension
Basic infrastructure:Basic infrastructure:only incremental adds of capacityonly incremental adds of capacity
Basic infrastructure:Basic infrastructure:only incremental adds of capacityonly incremental adds of capacity
Strong growth on x-dsl Strong growth on x-dsl Strong growth on x-dsl Strong growth on x-dsl
> 2005: NGN perspective > 2005: NGN perspective > 2005: NGN perspective > 2005: NGN perspective
Maintenance, Fiber Optic for Maintenance, Fiber Optic for Corporates, Unbundling works, Corporates, Unbundling works,
New areas, Third party-coordinationNew areas, Third party-coordination
Maintenance, Fiber Optic for Maintenance, Fiber Optic for Corporates, Unbundling works, Corporates, Unbundling works,
New areas, Third party-coordinationNew areas, Third party-coordination
20022002200220022003-20042003-2004
-2005-2005 average average
2003-20042003-2004-2005-2005
average average
I T c o n t r i b u t i n g t o
t h e c o s t r e d u c t i o n
a n d g r o w t h p r o g r a m s
I T c o n t r i b u t i n g t o
t h e c o s t r e d u c t i o n
a n d g r o w t h p r o g r a m sJean-Paul CottetJean-Paul Cottet
2003 - 2005 cum.
savings 1,5 Bn
2002 2003 2004 2005
1. IT savings* as budgeted in 20021. IT savings* as budgeted in 2002
* Rough figures
Bn euros
3.13.1 -0.3-0.3 -0.5-0.5 -0.7-0.7
IT ExpensesIT Expenses (CAPEX + OPEX)(CAPEX + OPEX)
IT ExpensesIT Expenses (CAPEX + OPEX)(CAPEX + OPEX)
2002 2003 2004 2005
2003 - 2005 cum.
savings 2 Bn
3.13.1 -0.6-0.6 -0.7-0.7 -0.7-0.7
1. IT actual savings as in 20031. IT actual savings as in 2003
Bn euros
2003 - 2005 cum.
savings 1,5 Bn
IT ExpensesIT Expenses (CAPEX + OPEX)(CAPEX + OPEX)
IT ExpensesIT Expenses (CAPEX + OPEX)(CAPEX + OPEX)
Infrastructure rationalization– Roll-out of more optimized IT architectures– Desktop and servers simplification and re-
engineering– Consolidation of data centers
Infrastructure rationalization– Roll-out of more optimized IT architectures– Desktop and servers simplification and re-
engineering– Consolidation of data centers
2. How was it achieved?2. How was it achieved?
Project portfolio streamlining– Killing useless or redundant applications– Cancelling or delaying less value-added
projects– Focusing projects on high-value functionality
Project portfolio streamlining– Killing useless or redundant applications– Cancelling or delaying less value-added
projects– Focusing projects on high-value functionality
January 2003:– 100 Production Data Centres– 60 Operations Teams
January 2003:– 100 Production Data Centres– 60 Operations Teams
End of 2003:– 36 Production Data Centres– 27 Operations Teams
End of 2003:– 36 Production Data Centres– 27 Operations Teams
2004:– 15 Production Data Centres– 1 Integrated Operations Team
2004:– 15 Production Data Centres– 1 Integrated Operations Team
2. How was it achieved?2. How was it achieved?Data center consolidationData center consolidationData center consolidationData center consolidation
2. How was it achieved?2. How was it achieved?
Project portfolio streamliningProject portfolio streamlining– Killing useless or redundant applicationsKilling useless or redundant applications– Cancelling or delaying less value-added projectsCancelling or delaying less value-added projects– Focusing projects on high-value functionalityFocusing projects on high-value functionality
Infrastructure rationalizationInfrastructure rationalization– Roll-out of more optimized IT architecturesRoll-out of more optimized IT architectures– Desktop and servers simplification and Desktop and servers simplification and
re-engineeringre-engineering– Consolidation of data centers Consolidation of data centers
Sharing Experiences and ProjectsSharing Experiences and Projects
2. How was it achieved?2. How was it achieved?
Sourcing: from the acquisition period …Sourcing: from the acquisition period …Sourcing: from the acquisition period …Sourcing: from the acquisition period …
Network, Network, ININ
BillingBilling
Business Business SupportSupport
Service Service PlatformPlatform
IN / SCPIN / SCP
Life ServicesLife Services
Provisioning / Provisioning / Order Mgmt.Order Mgmt.
CRMCRM
ERPERP
MediationMediation
FunctionFunction
Interconnection Interconnection 33rdrd Party PartySettlementSettlement
MCO1MCO1
Rating, Rating, Invoicing, Invoicing, Balance Balance
ManagementManagement
Rating, Top-Up, Rating, Top-Up, Balance Balance
ManagementManagement
MCO2MCO2 MCO3MCO3 MCO4MCO4 MCO5MCO5 MCO6MCO6 MCO7MCO7 MCO8MCO8
… to an after-merger rationalization:PeopleSoft v8 Footprint
… to an after-merger rationalization:PeopleSoft v8 Footprint
Orange DnkOrange Dnk
NovisNovis
Poland:Poland:- TPSATPSA- CentertelCentertel
Spain:Spain:- Uni2Uni2- WanadooWanadoo
France:France:- - FixedFixed- Business- Business- Mobile SAV- Mobile SAV- Fixed SAVFixed SAV- WanadooWanadoo
MobistarMobistarUK:UK:- FreeserveFreeserve- OrangeOrange
On trackOn trackUnder study
Rolled out
2. How was it achieved?2. How was it achieved?
Project portfolio streamlining– Killing useless or redundant applications
– Cancelling or delaying less value-added projects
– Focusing projects on high-value functionality
Infrastructure rationalization– Roll-out of more optimized IT architectures
– Desktop and servers simplification and re-engineering
– Consolidation of data centers
Sharing Experiences and Projects Sourcing Policy
Project portfolio streamlining– Killing useless or redundant applications
– Cancelling or delaying less value-added projects
– Focusing projects on high-value functionality
Infrastructure rationalization– Roll-out of more optimized IT architectures
– Desktop and servers simplification and re-engineering
– Consolidation of data centers
Sharing Experiences and Projects Sourcing Policy
2. How was it achieved?2. How was it achieved?
0
5
10
15
20
25
Fixed MassMarket Fixed corporate Mobile postpaid
Days
2002 2003 2004
3. IT savings obtained without jeopardizing the business
3. IT savings obtained without jeopardizing the business
Time-to-bill KPI significantly improvedTime-to-bill KPI significantly improved
1 day = 50 Meuros in Working Capital (02Z, FE, CFRT)
Increase of the process efficiencyIncrease of the process efficiency
3. IT savings obtained without jeopardizing the business
3. IT savings obtained without jeopardizing the business
Flow-through: better than 95% for fixed-line services and DSL provisioning (without jumpering)
Flow-through: better than 95% for fixed-line services and DSL provisioning (without jumpering)
Increase of the process efficiencyIncrease of the process efficiencyIncrease of the process efficiencyIncrease of the process efficiency
Customer careCustomer careActivationActivation
Customer serviceCustomer service
Order entryOrder entryBillingBilling
Mobile Number portability (GPO)
Cash management in FT agencies (VEGAS)
Corporate Customer RM in France (E-Force)
Mass Market CRM in Poland
Financial and HR Group ERP Wanadoo, Orange (Delphi / Convergence – HARP)
Mobile Number portability (GPO)
Cash management in FT agencies (VEGAS)
Corporate Customer RM in France (E-Force)
Mass Market CRM in Poland
Financial and HR Group ERP Wanadoo, Orange (Delphi / Convergence – HARP)
Content billing for Orange
Account receivables & Dunning for Wanadoo (ICAR)
Business Billing in Poland (Billbiz)
Centertel CRM
Uni2 CRM (PMA)
Content billing for Orange
Account receivables & Dunning for Wanadoo (ICAR)
Business Billing in Poland (Billbiz)
Centertel CRM
Uni2 CRM (PMA)
3. IT savings obtained without jeopardizing the business
3. IT savings obtained without jeopardizing the business
Roll-out of major projectsRoll-out of major projects
New Projects launchedNew Projects launched
20032003
+ 40%+ 40%
Alignment with the business Units strategyAlignment with the business Units strategy(Gartner Broadbent pyramid)(Gartner Broadbent pyramid)
Alignment with the business Units strategyAlignment with the business Units strategy(Gartner Broadbent pyramid)(Gartner Broadbent pyramid)
3. It savings obtained without jeopardizing the business
3. It savings obtained without jeopardizing the business
ProductProduct& services& services
BusinessBusinessIntelligenceIntelligence
ProcessProcess
InfrastructureInfrastructure
20042004
ProductProduct& services& services
BusinessBusinessIntelligenceIntelligence
ProcessProcess
InfrastructureInfrastructure
2002 2003 2004 2005
2003 - 2005 cum.
savings 1,7 Bn
3.13.1 -0.6-0.6
1. It actual savings including Growth Program
1. It actual savings including Growth Program
Bn euros
2003 - 2005 cum.
savings 1,5 Bn
IT ExpensesIT Expenses (CAPEX + OPEX)(CAPEX + OPEX)
IT ExpensesIT Expenses (CAPEX + OPEX)(CAPEX + OPEX)
R o a d m a pt o
C o n v e r g e n c e
R o a d m a pt o
C o n v e r g e n c e
Sanjiv AhujaSanjiv Ahuja
France Telecom Group InfrastructureFrance Telecom Group Infrastructure
A Complex InfrastructureA Complex Infrastructure
WLANAccessWLANAccess
TelephoneTelephone
ADSLTerminals
ADSLTerminals
Circuit coreCircuit core
Packet CorePacket CoreADSLAccessADSL
Access
WLANTerminals
WLANTerminals
POTS/ISDNAccess
POTS/ISDNAccess
Mo
bil
eM
ob
ile
Fix
edF
ixed
TransportbackboneTransportbackbone
DevicesDevicesDevicesDevices
GSM/GPRSAccess
GSM/GPRSAccess
WLANAccessWLANAccess
GSM/GPRSHandsets
+ SIM
GSM/GPRSHandsets
+ SIM
UMTSHandsets
+ USIM
UMTSHandsets
+ USIM
ServiceServiceNetworkNetworkServiceServiceNetworkNetwork
Circuit coreCircuit core
Packet CorePacket Core
UMTSAccessUMTS
Access
WLANTerminals
WLANTerminals
EnhancedNetworkServices
EnhancedNetworkServices
MM ServicesPlateform
MM ServicesPlateform
Third PartyMiddlewareThird PartyMiddleware
OrangeServicesOrange
Services
Third PartyMiddlewareThird PartyMiddleware
FTServices
FTServices
EnhancedNetworkServices
EnhancedNetworkServices
AccessAccessNetworkNetworkAccessAccessNetworkNetwork
CoreCoreNetworkNetwork
CoreCoreNetworkNetwork
Service Network EvolutionService Network Evolution
ServiceNetworkServiceNetwork
Rea
l T
ime
Rea
l T
ime
Ser
vice
sS
ervi
ces
Rea
l T
ime
Rea
l T
ime
Ser
vice
sS
ervi
ces
ServiceNetworkServiceNetwork
Intelligent Network Proprietary APIs Intelligent Network Proprietary APIs
Open Middleware
Open Middleware
Open standards Easy to deploy Open standards Easy to deploy
ServiceNetworkServiceNetwork
ServicePlateformService
PlateformUnified Service
PlatformUnified Service
Platform
No
n R
eal
Tim
e N
on
Rea
l T
ime
Ser
vice
sS
ervi
ces
No
n R
eal
Tim
e N
on
Rea
l T
ime
Ser
vice
sS
ervi
ces
Specific services offer Access dependent Specific services offer Access dependent
IMS based servicesIMS based services
20032003 2004 + 2004 + 2006 + 2006 +
Convergence of theservice logic
Real Time and NonReal Time services
Develop once / Deploy everywhere
Consistent services and applications
Convergence of theservice logic
Real Time and NonReal Time services
Develop once / Deploy everywhere
Consistent services and applications
Leading the Industry in Fixed/Mobile Integrated ServicesLeading the Industry in Fixed/Mobile Integrated Services
Core Network EvolutionCore Network Evolution
Simplifying Network to reduce Capex and CostsSimplifying Network to reduce Capex and Costs
FixedFixed
Cir
cuit
Cir
cuit
Sw
itch
edS
wit
ched
Cir
cuit
Cir
cuit
Sw
itch
edS
wit
ched MobileMobile
MobileMobile
Pac
ket
Pac
ket
Net
wo
rkN
etw
ork
Pac
ket
Pac
ket
Net
wo
rkN
etw
ork
FixedFixed
Joint TransitBackbone
Transport on TDM
Joint TransitBackbone
Transport on TDM
JointTransportover ATM
JointTransportover ATM
1995 1995 2006 + 2006 +
Convergence Transport of Voice and Data over Mobile
and Fixed
Convergence Transport of Voice and Data over Mobile
and Fixed
Leverage packet price & performance
Consistent infrastructure– Reduced capex– Reduced opex
Consistent standard of services
Leverage packet price & performance
Consistent infrastructure– Reduced capex– Reduced opex
Consistent standard of services
19981998 2002-20032002-2003
Access Network EvolutionAccess Network Evolution
GSMGSM
GPRSGPRS
UMTSUMTS
WirelineWireline
DSLDSL
FiberEthernet
FiberEthernet
2003 +2003 +VoiceVoice
DataData
Convergence in Mobile and Fixed AccessConvergence in Mobile and Fixed Access
WLANWLANWLANWLAN
Improved Cost Performance through New TechnologiesImproved Cost Performance through New Technologies
Access Network EvolutionAccess Network Evolution
Enhanced Customer experience
– Voice and Data services are more efficiently delivered on UMTS technology
Reduced expense
Strong price performance improvement
Reduced Capex
Enhanced Customer experience
– Voice and Data services are more efficiently delivered on UMTS technology
Reduced expense
Strong price performance improvement
Reduced Capex
Ratio GSM / UMTS Cost per serviceRatio GSM / UMTS Cost per serviceRatio GSM / UMTS Cost per serviceRatio GSM / UMTS Cost per service
Voice
Data
0
1
2
3
4
Dense UrbanDense Urban UrbanUrban RuralRural
EnvironmentsEnvironments
Handset EvolutionHandset Evolution
2004 +
Seamless User Experience through Mobile / Fixed Handsets
Co-operative Intelligence
Seamless User Experience through Mobile / Fixed Handsets
Co-operative Intelligence
FixedHandsets
FixedHandsets
MobileHandsets
MobileHandsets
Convergence of Handsets
Convergence of Handsets
MediaEnabledMobile
Handsets
MediaEnabledMobile
Handsets
MediaEnabled
FixedHandsets
MediaEnabled
FixedHandsets
ServiceServicePlatformPlatformServiceServicePlatformPlatform
Co-operativeIntelligence
Co-operativeIntelligence
Voice SMS / MMS WAP Internet
browsing
Voice SMS / MMS WAP Internet
browsing
Voice Limited
other services
Voice Limited
other services
Combined fixed / mobile handsets
Combined fixed / mobile handsets Voice
Multi-media services
Data / Internet / Video
20032003 2006 + 2006 + 20042004
IT Infrastructure ConvergenceIT Infrastructure Convergence
2003
[ ][ ][ ][ ][ ][ ][ ][ ]CRMCRMCRMCRM
[ ][ ][ ][ ]ContentBilling
ContentBilling
[ ][ ][ ][ ][ ][ ]Core
BillingCore
Billing
[ ][ ][ ][ ]CoreOSSCoreOSS
[ ][ ][ ][ ]Data
CentersData
Centers
CRMCRM
ContentBilling
ContentBilling
CoreBillingCore
Billing
CoreOSSCoreOSS
[ ][ ][ ][ ]Data
CentersData
Centers
Current
IT Infrastructure ConvergenceIT Infrastructure Convergence
2003 2004
[ ][ ][ ][ ][ ][ ][ ][ ]CRMCRMCRMCRM
[ ][ ][ ][ ]ContentBilling
ContentBilling
[ ][ ][ ][ ][ ][ ]Core
BillingCore
Billing
[ ][ ][ ][ ]CoreOSSCoreOSS
[ ][ ][ ][ ]Data
CentersData
Centers
CRMCRM
ContentBilling
ContentBilling
CoreBillingCore
Billing
CoreOSSCoreOSS
[ ][ ][ ][ ]Data
CentersData
Centers
CRMCRM
ContentBilling
ContentBilling
[ ][ ][ ][ ][ ][ ]Core
BillingCore
Billing
[ ][ ][ ][ ]CoreOSSCoreOSS
[ ][ ]Data
CentersData
Centers
CRMCRM
ContentBilling
ContentBilling
CoreBillingCore
Billing
CoreOSSCoreOSS
[ ][ ]Data
CentersData
Centers
SimplificationCurrent
IT Infrastructure ConvergenceIT Infrastructure Convergence
2003 2004 2004 / 2005
Convergence
[ ][ ][ ][ ][ ][ ][ ][ ]CRMCRMCRMCRM
[ ][ ][ ][ ]ContentBilling
ContentBilling
[ ][ ][ ][ ][ ][ ]Core
BillingCore
Billing
[ ][ ][ ][ ]CoreOSSCoreOSS
[ ][ ][ ][ ]Data
CentersData
Centers
CRMCRM
ContentBilling
ContentBilling
CoreBillingCore
Billing
CoreOSSCoreOSS
[ ][ ][ ][ ]Data
CentersData
Centers
CRMCRM
ContentBilling
ContentBilling
[ ][ ][ ][ ][ ][ ]Core
BillingCore
Billing
[ ][ ][ ][ ]CoreOSSCoreOSS
[ ][ ]Data
CentersData
Centers
CRMCRM
ContentBilling
ContentBilling
CoreBillingCore
Billing
CoreOSSCoreOSS
[ ][ ]Data
CentersData
Centers
CRMCRM
ContentBilling
ContentBilling
[ ][ ][ ][ ][ ][ ]Core
BillingCore
Billing
[ ][ ][ ][ ]CoreOSSCoreOSS
DataCenters
DataCenters
CoreBillingCore
Billing
CoreOSSCoreOSS
ConvergenceSimplificationCurrent
Customer Benefits of IntegrationCustomer Benefits of Integration
Internet servicesInternet services
Mobile servicesMobile services
Fixed servicesFixed services
Integrated wirelines / Integrated wirelines / wireless serviceswireless services
Consistent customer Consistent customer experience irrespectiveexperience irrespectiveof access technologyof access technology
Rapid time to marketRapid time to market
Simplified customer Simplified customer relationshiprelationship
Differentiation through integrationDifferentiation through integration
S o u r c i n g c o n t r i b u t i n g
t o t h e c o s t r e d u c t i o n
a n d g r o w t h p r o g r a m s
S o u r c i n g c o n t r i b u t i n g
t o t h e c o s t r e d u c t i o n
a n d g r o w t h p r o g r a m sLouis-Pierre
WenesLouis-Pierre
Wenes
Volume Volume concentratioconcentratio
nn
Product Product specificationspecificationimprovementimprovement
Best price Best price evaluationevaluation
Joint process Joint process improvementimprovement
Relationship Relationship restructuringrestructuring
Global Global sourcingsourcing
TOP Sourcingstrategies
Sourcing strategiesSourcing strategies
Supplier portfolio reduction Supplier portfolio reduction
Bundling volume Bundling volume
Price comparison modelsPrice comparison models
Index and price erosionIndex and price erosion
Extension of competitionExtension of competition
Configuration standardization Configuration standardization at Group levelat Group level
Key suppliers developmentKey suppliers development
Demand Demand ManagementManagement
Supply ChainSupply Chain
Increasing purchasing power and creating technology advantage
Increasing purchasing power and creating technology advantage
Planning and cumulative cash impactPlanning and cumulative cash impact
Wave 1 in implementation phase and Wave 2 half way through
Wave 1 in implementation phase and Wave 2 half way through
Wave
Wave
2
Q3 Q4
Wave
1
Q2Q1Q4Q3Q2Q1
Wave
Wave
2
Q3 Q4
Wave
1
Q2Q1Q4Q3Q2Q1
2003 2004
Implement.Sourcing 45% of total45% of total
25% of total 25% of total
Implement.Sourcing
Implement.Sourcing
3
20032003 20042004 2005200520032003 20042004 20052005
€ € 700 M700 M
€ € 2 200 M2 200 M
€ € 4 000 M4 000 M
Wave 1Wave 1 11
Wave 2Wave 2
Wave 3Wave 3
ContinuousContinuousImprovementImprovement..
2002 price base 2002 price base
Convergence Benefits on CapexConvergence Benefits on CapexCapex as a % of Total RevenuesCapex as a % of Total RevenuesCapex as a % of Total RevenuesCapex as a % of Total Revenues
5% to 6%5% to 6%
2% to 3%2% to 3%
4% to 5%4% to 5%up to 1%up to 1% -1%-1%
-1% to -2%-1% to -2%10%10%
to 12% to 12%
12% to 15%12% to 15%
MaintenanceCapex &Common
IT Capex+ Services
New NetworkCapex (UMTS,
DSL, Fiber,etc.)
Other Total Capexwithout
ConvergenceBenefits
Costsbenefits
ofConvergence
Sourcing Savings
FT GroupCapex
10 to 12% is a sustainable level10 to 12% is a sustainable level