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I n v e s t o r D a y

I n v e s t o r D a y. Innovation and Growth. N o v e m b e r 1 2 t h , 2 0 0 3. Business review. Michel Combes Jean-Paul Cottet Barbara Dalibard. Jean-Yves Gouiffès Olivier Sichel Wilfried Verstraete. CAUTIONARY STATEMENT.

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I n v e s t o r D a y

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  1. I n v e s t o r D a y • Innovation and Growth • N o v e m b e r 1 2 t h , 2 0 0 3

  2. Business review • Michel Combes • Jean-Paul Cottet • Barbara Dalibard • Jean-Yves Gouiffès • Olivier Sichel • Wilfried Verstraete

  3. 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, France Telecom’s other strategic, financial and operating initiatives, changes in economic, business and competitive markets, risks and uncertainties attendant upon international operations, technological trends, 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 certain measures calculated based on French GAAP information. For a definition of these measures, please refer to slide 55. In accordance with market authorities’ recommendations, France Telecom is no longer using the acronym “EBITDA” for Operating income before depreciation, but the French acronym “REAA”.

  4. Revenue growth TOP Margins trends Capex Cash generation Business review: Key operating themes Finding the right balance between growth and profitability

  5. R e v e n u e g r o w t h What is underpinning FT’srevenue targets? 5 5

  6. Revenue growth: FT objective Pro forma Revenue growth Objective2004-5 • Higher end of the +3%* to +5%* range Key drivers • Growth in mobile • Fixed line business initiatives • Wanadoo & other international * Pro forma basis 54 revenues growth initiatives (TOP-LINE) of which 14 cross division projects

  7. Control risks Reinforcepositions Developnew services Leveragegrowth levers Increasesynergies Revenue growth: Growth initiatives Number of initiatives by division, transversal Number of initiativesby objective Transversal Orange Others Wanadoo International Fixed (Corporate) Fixed (Retail) A group-wide initiative

  8. R e v e n u e g r o w t h Orange

  9. Revenue growth: Orange objectives 2003 • Growth inflexion achieved: • New management • Focus on existing footprint • Improve client mix • Launch Orange World Objective 2004-5 • Improve growth above 2003 trend Key drivers • Momentum of 2003 • New “ease of use” initiatives and 3G • Growth management : market based andsegmentation After a rebuilt momentum in 2003, Orange expected to improve revenue growth in 2004

  10. Revenue growth:Orange momentum in 2003 Quarterly net adds (000s) and growth (%) Quarterly total revenues (€m) & growth (%) 8.1% 90.4% 2.5% 25.0% -50.4% -6.3% 1,325 4,255 4,360 4,714 696 557 Q1 03 Q2 03 Q3 03 Q1 03 Q2 03 Q3 03 • Orange has built a strong customer base in 2003 with improved mix • A favourable launchpad for growth going forward • Rest of the world contributing to 82% of customer net add in 9m 03 Note: reported numbers. Favourable trends already visible at Orange in 2003,RoW is a growth engine for Orange

  11. Revenue growth: Orange ARPU in 2003 Orange France ARPU (€) Orange UK ARPU (£) 15.6% 10.9% 8.7% 13.7% voice non voice Note: ARPU is annual rolling average revenue per user. Continuous improvement in ARPU

  12. Revenue growth: Orange World in 2003 Orange experience • One icon for access to a wide range of non-voice services • One simple tariff throughout Europe (Orange World access / forfait Orange World) • An opportunity to try new services and a unified orange world portal • A choice of phones (including the Orange Signature range) Benefits for both customers and Orange • More attractive handsets and services combined with a simple price and a personalised feature stimulate wider usage • Gain extra added value customers, and improve customer loyalty A key initiative already launched to drive non voice service usage

  13. Revenue growth: Orange World roadmap Nov 2003 Q1 04 Q2 04 • UK • France • Switzerland • Denmark • Netherlands • Belgium • Romania • Slovakia Benefits for both customers and Orange • Extension of richer and standard offers outside Orange core markets, to conform brand value and expectations • Deploy a seamless offer across the European footprint with limited costs Advantages of a pan-European offer

  14. Revenue growth: Orange 2004 initiatives • Targeted offers, loyalty programs, • tariff refresh and retention program Improve Customer mix &segmentation Improve Yield • International offers to MNC, holiday • offers, and “last minute” offers Non voice • Promote MMS use, launch SMS email alert, roll-out IM service, launch w-HA micro payment • platform

  15. Revenue growth: Orange 2004 initiatives New handsets • Increase Signature device penetration Roaming • Enable prepaid roaming across footprint, introduce new services (short-code dialing), GPRS roaming, leverage “Open Seamless Alliance” Multiple initiatives stimulating growth in addition to tranversal projects

  16. Revenue growth: Orange 2004 3G commercial launch objectives UK Commercial trials in major cities UK Commercial Launch in ten major cities, major rail lines and airports, with 50% population coverage • Commercial Launch in: • Switzerland • Belgium France Commercial launch in ten major cities France Developing ‘Villes Orange’ trials in Toulouse and Lille 2003 2004 2005 Orange confirms its 3G targets

  17. 2005 2004 data revenue 2003 10% 15% 20% 25% 30% data as % revenue Revenue growth: Orange view of 2004-05 data revenue growth Note: bubble size denotes targeted data ARPU.

  18. Revenue growth: Orange into 2004 Market assumptions • Increased competition in the UK with “3” and Tesco • But no threat on value customers • No major impact of VOD-SFR joint marketing • F/M price regulation already built in expectations • Bill&Keep exit in France assumed from july 1st 04 Regulation Visibility On revenue • Orange has regained control of its growth levers Orange revenue growth expected to improve in 2004 from 2003 trends

  19. R e v e n u e g r o w t h Fixed line in France

  20. Revenue growth: Fixed line France objective • Reach the inflexion point Objective 2004 Key drivers • Broadband (retail & corporate) • New services (retail & corporate) • New handsets (retail) Full FT group objective consistent with cautious stance on fixed in France

  21. Revenue growth: Fixed line France 2003 Number of lines • Slight decrease over 9 months Traffic market share • Slower decline in local • Long distance market share around 63% Broadband • 1.1m new ADSL lines over 9 months Data transmission services • 18% growth over 9 months, lower growth from Q3 • despite roughly stable market share * Pro forma growth Contributive revenue down 2.4%* for the segment over 9 monthsRetail markets more resilient than corporate & wholesale

  22. Revenue growth: Fixed line France challenges in 2004 Markets • Uncertainty for economic growth • Declining market for voice • Strong momentum For ADSL • Subscription resale, broadband wholesale prices Regulation • Fixed line retail market still has untapped potential • for new services and marketing offers Retail Market trends Corporate Market trends • A more cyclical market, price decline and adverseproduct mix effect Pro-actively seeking the inflexion point in a challenging context

  23. Revenue growth: Fixed line France market assumptions • Fixed voice volume still declining • Access linesslightlydown • Economic climate to improve in 2004 • IT spending take up to have a favourable delayed impact Mixed signals for 2004, comparable to 2003

  24. Revenue growth: Fixed line France regulatory assumptions • Liste Rouge* free since August 6,2003 (€ 130 M full year impact) • Line resale: no decision yet and very small impact if any in 2004 • Subscription fee increase requested as soon as possible and assumed early 2004 • FT expects more freedom in highly competitiveurban areas • Fixed/Mobile price cut * Unlisted numbers Neutral for revenue with FT current assumptions

  25. Revenue growth: Fixed line France 2004 broadband initiatives • Increase penetration in France • Boost broadband adoption with new services • Video-telephony • TVoDSL and video-on-demand • Home networks • Wifi • Broadband for corporate Objective of 4.5m ADSL line end of 2004 up circa 50% yoy Broadband remains the growth engine

  26. Revenue growth: Fixed line France 2004 initiatives Increase loyalty • Extend tariff plans, extend range of flat fee offers • Subscription fee increase, tariff packages,increase penetration of service options, increasebroadband penetration to protect lines installed Defend telephonyrevenue New channel management • Develop new distribution channels, increasemarket coverage (shop & online)

  27. Revenue growth: Fixed line France 2004 initiatives on handsets • Improve telephony experience with new handsets • That parallel mobile handsets look-and-feel, functionality • That facilitate penetration of new network services(SMS, address book, reachability, etc.) • Milestones • YE 2003 : 50% of devices sold to be DECT / SMS compatible • 2004 : over 90% of devices sold to be SMS compatible • mid 2004 : launch MMS terminals • Sales to double in 2004 Develop new services, spur voice usage

  28. Revenue growth: Fixed line France 2004 initiatives FUN120€ CORDLESS DECT Phones Even for small budget Large Array of SMS compliant Handsets COULEUR Premium & Discovery Premium & Discovery SwissVoice 125 ARIA DOROMATRA Alcatel Versatis 790 SILLAGE 3000 Alcatel Versatis 1190 SAGEM D 70V Security for Seniors SIEMENS A110 Siemens Gigaset S100 Philips Zenia 300 Siemens Gigaset E150 INVENTEL MACARON

  29. Revenue growth: Fixed line France 2004 initiatives PABX and CPE From a current market share of 20% (EUR1bn market size), a refocused organization should improve FT positions Intranet for SME Adapt large account type intranet offers to SME Managed Services & outsourcing Reposition offer as part of FT communication Service business. Strengthen proactive sales approach. FT expects significant outsourcing deals

  30. R e v e n u e g r o w t h Wanadoo & Other international

  31. Revenue growth: Rest of the group objective Objective 2004 Positive growth in line with total group trend Key drivers Strong momentum at Wanadoo Mobile growth at TP Growth initiatives in France planned to be developed abroad

  32. 2,071 Netherlands 1,819 Spain 1,613 UnitedKingdom 1,374 982 France 2003E 2002 Sept.2002 Dec.2002 March2003 June2003 Sept.2003 Revenue growth: Wanadoo 2003 Internet penetration by country(percentage) Number of Wanadoo broadbandcustomers in Europe(in thousands) Source: Jupiter Research – February 2003 ADSL markets in Europe grow 50 %+ per year

  33. Wanadoo / France Telecom T-Online AOL Tiscali Free Telefonica/ Terra BT N°1(64%) N°4(7%) N°2 (8%) N°4 (6%) N°3 (13%) -- -- France N°1 (7%) -- N°2 (11%) N°7 (4%) -- -- N°3 (51%) UK N°2(10%) N°4 (n/a) -- N°5 (n/a) -- N°1 (81%) -- Spain N°2 (10%) -- -- N°2 (6%) -- -- -- Netherlands -- N°1 (73%) N°3 (9%) N°4 (2%) -- -- -- Germany -- -- -- N°3 (5%) -- -- -- Italy Revenue growth: Wanadoo 2003 Internet access ranking and estimated ADSL market share Source: wanadoo estimate, June 30, 2003

  34. France Revenue growth: Wanadoo 2003 UK Spain Netherlands 1,564,000 + 87, 000 • Brand name • Marketing and technical innovation (Wi-Fi) • Wanadoo eXtense • Wi-Fi PS2 • Wanadoo eXtense • Wi-Fi PC Card Orange • Multimedia eXtense Pack BBsubscribersend Q3 123,000 +17, 000 • 2.5m narrowband customers to be migrated onto broadband • “Moneyback guarantee” ADSL offer with 1 month subscription on a trial basis • 2 months free subscription for signup in Dixons stores 148,000 +12,000 • Clear alternative to Telefonica /Terra • 34% market share with 1.5m customers • Modem & router ADSL offer with fixed IP address for SMEs • Time-based ADSL offer • Flat-rate plans for unlimited Internet access and phone calls with Uni2 235,000 + 13, 000 • 47% of the customer base is broadband • New Wi-Fi offer • Broadened cable offer (Wanadoo Cable Easy) Increase inSeptember Strenghts New offers

  35. Revenue growth: Wanadoo 2004 initiatives and objectives • Wanadoo France • Boost sales in France • Increase value for broadband • + 60% ADSL revenues / At least 50% acquisition share • Internet services • Develop paid-for services • Develop B2B mobile interactive services • Double paid-for service revenues • Directories • Maximize the value of the customer base • Enhance White pages with the inclusion of mobile numbers • Develop mobile services • Increase by 5% the total number of advertisers and increase the ARPA Broadband to support growth in France, Yellow pages not yet mature

  36. Revenue growth: Wanadoo 2004 initiatives and objectives • Wanadoo UK • Drive on broadband and diversify / optimize distribution • Double ADSL revenues / Exceed 10% of the overall customer base (6% en 2003) • Wanadoo Spain and Wanadoo Nederlands • Enhance ADSL positions • Leverage on our French innovations to boost market share • Boost ADSL revenues Leverage broadband growth out of France and maintain a broadband leadership in Europe

  37. Revenue growth: Wanadoo Wanadoo going forward Key targets 2004 ADSL revenue up 60% in France Double paid for revenue Increase by 5% total number of advertisers for YP Double ADSL revenue in the UK Wanadoo going forward Remaining potential to unfold Leader on a high growth market in Europe that the Group intend to fully exploit Wanadoo is one of the FT’s group growth engine

  38. Revenue growth: Equant 2004 initiatives • In a recovering market, Equant expect to maintain its leading position • In spite of indirect sales (outside FT) decreasing • By developping installed customer base and offering a complete network services portfolio • By developping existing and new outsourcing contracts • By refocusing sales and delivery toward value added services (consulting, project, service management) Equant is a core international asset of FT group

  39. Revenue growth: TP 2004 initiatives • New Pricing Plans • ADSL • Customer Care: CRM & « 3000 » Fixed Line Penetration • New offers • Focus on Business Market Share • Convergent Fixed + Mobile approach • Data Services • Orange intimacy Mobile Penetration& Market Share • New Offers: IP VPN / IN Numbers / … • New sales organisation • Large projects Business Penetration

  40. T O P a n d o t h e ro p e r a t i n g t h e m e What is the profitability trend?

  41. TOP: what’s next? TOP in 2004 Facts Group’s reengineering leads to further efficiency gains and better quality of service Sourcing: approx EUR1.5bn full year impact in 2004 for Opex+Capex Capex sharing (eg: IT & network application convergence)Continuous improvement in Opex control (eg:saving trackers, process reengineering and best practices) Working capital :Billing process improvement Key drivers FT fully focused on TOP execution which remains the key priority

  42. TOP : 2004 key initiatives • Key initiatives in 2004: • Sourcing: launch of Wave 3, full implementation of Wave2 • Capex:Focus on growth (UMTS, ADSL), sharing for IT • Opex: New process for local network units “URR”in France, rationalize international network supervision, Continuous optimization of IT operation and communication spend • Working capital: mutualize ressources to improve corporates Clients billing • New projects to be launched in 2004: revenue insurance, supply chain,network procurement TOP is an evolving program

  43. Other operating themes: operating margins Operating margins trends 2004-05 Objective 2004-5 Improvement from 2003 and consistent with approx 40% REAA margin objective in 2005 Impact of sourcing in 04 (approx 1% of REAA margin), continuous improvement of TOP program, Headcount reduction over 2003-2005 (approx 0.5% REAA margin in 04 for total group labor cost decrease) Other Opex gains compensated by R&D and SAC increase Key drivers Toward approx 40% REAA margin in 2005

  44. Other operating themes: Capex Capex policy for 2004-2005 Objective 04-05 Increase from 2003 level in spite of sourcing gains (approx 25% of capex reduction in Q3 03) Key drivers UMTS capex, broadband and new services development Back to approx 11% capex / sales ratioFT can be fully prepared for growth in spite of contained capexlevels through new efficiencies

  45. Other operating themes: Cash generation Cash generation from operations Objective 2005 confirmed REAA-Capex / revenue ratio approx 29% in 2005 REAA-Capex rising through revenue growth Key drivers Revenue at the high end of +3 and +5% range 2005 REAA margin approx 40% 2005 Capex/Sales approx 11% The right balance between operating margin and revenue growth.Objective of Net debt/REAA below 2.5 for 2004 and between 1.5 and 2 for 2005

  46. France TelecomInvestor Day Conclusion Frank E. Dangeard 46

  47. 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, France Telecom’s other strategic, financial and operating initiatives, changes in economic, business and competitive markets, risks and uncertainties attendant upon international operations, technological trends, 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 certain measures calculated based on French GAAP information. For a definition of these measures, please refer to slide 55. In accordance with market authorities’ recommendations, France Telecom is no longer using the acronym “EBITDA” for Operating income before depreciation, but the French acronym “REAA”.

  48. Summary of Investor Day Group priorities Use of cash External growth and equity structures Management drivers

  49. Investor Day Conclusions (1) 1. All previous guidance confirmed • Revenue growth: top end of 3 to 5% range • REAA: towards app. 40 % margin in 2005 • Capex ratio: 10 to 12 % of sales • Leverage: 1.5 to 2 Net Debt / REAA ratio in 2005 2. Revenue growth can be achievedwithout jeopardizing deleveraging and capital intensity targets You have met the ExCom members responsible for delivering on these commitments

  50. Investor Day Conclusions (2) 3. Guidance underpinned by TOP and TOP-LINE programs • Numerous product, service and "back-office" roadmap commitments announced today 4. As in the case of TOP, TOP-LINE requires reengineeringof the FT Group's "business models" in: • Corporate solutions • Broadband access and services • Business integration 5. Partnerships and innovation will play an important role Top end of 3 to 5% growth range — 1.5 to 2 Net Debt / REAA ratio in 2005

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