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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

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. 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. Objectives of the Day.

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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

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  1. W e l c o m e t o t h eF r a n c e T e l e c o m I n v e s t o r D a y

  2. 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

  3. Objectives of the Day • Explain France Telecom view of innovation and partnerships as growth and cost efficiency drivers • Explain why and how France Telecomgrowth 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

  4. 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

  5. Agenda for the Day (2) 5. Lunch and demos 6. Business Review M. Combes O. Sichel W. Verstaete J.-Y. Gouiffès B. Dalibard J.-P. Cottet 7. Conclusion F. Dangeard 8. Q & A ExCom

  6. Building Momentum for Growth • Thierry BretonChairman and CEO

  7. 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.

  8. Delivering on our commitments • Anticipating Industry structural changes • Building momentum for Growth

  9. Ambition FT 2005: Commitments to Master our Destiny Address liquidity constraints & restore balance sheet structure Implement NewManagement & NewOrganization 15+15+15 Execute an ambitious but realistic transformation program TOP Refocus on Strategic Priorities Assets disposalsNew Services Innovation The foundation for a comprehensive transformation of France Telecom

  10. New 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

  11. A management team that is delivering on FT’s commitments Results Commitments Restore the balance sheet Achieved in H1 2003, EUR15bn raised. FT regains the initiative Debt refinancing Achieved in H1 2003, liquidity crisis fully solved Improve Operational Performance TOP ahead of targets, initial 2003 targets reached over 9 months. FCF in 2003 EUR1bn ahead of initial target Innovation and Growth 40 Growth programs launched + 14 Transversal Focus on Strategic assets EUR 2.7bn asset disposal so far in 2003. Offer on Orange. The track record : clear road map, delivering quicker and over expectations, building momentum

  12. A sustained tempo, a clear roadmap “FT ambition 2005” New Management New Organization 15/15/15 Top Program TOP ahead of targets in Q1 TOP ahead of targets in Q3 TOP ahead of targets in Q2 “15bn” capital increase Orange offering Law removingFrench State majority holding obligation “15 Bn” debt refinancing Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Accelerated Broadband coverage of France Orange world Growth Initiatives launched Wanadoo photo album SMS on fixed line Leadership in WiFi deployment Integrated offers for SME Intranets and networking TV on ADSL Building a strong momentum as early as the first year

  13. Delivering on our commitments • Anticipating Industry structural changes • Building momentum for Growth

  14. A world still organized today around separate networks and services Fixed network and services • Access specific terminals • Access specific services • Independent service platforms • Multiple customer identifiers • Separate billing Mobile network and services Internet network and services

  15. In our vision the user is the center of his communications universe Information/entertainment • 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 The most important paradigm change the industry has ever seen Communication Transactions EXPLOSION OF USAGES: WHAT YOU WANT, WHERE YOU WANT, WHEN YOU WANT

  16. 2 3 Transaction systems Service platforms • Physical networks / • transport 1 Five major technology discontinuities will enable this revolution Ubiquitous wireless 3 2 Broadband everywhere 1 IP network 5 Delayered and open networkand IT platforms 4 Multi-access innovative devices

  17. IP Networks: The cornerstone of a delayered infrastructure 1 Mobile Device Open network Services WIFI Backbone mobile Network database (e.g.,HLR) 2G/2.5G Soft-switch(voice) 3G IN Fixed line (voice) 2G Data con-vergence applica-tions Subscriber switching Switching PSTN IP backbone IN Content Data IP access • DSL • FTTH • Cable Back-bone IP ISP Platform DSL IP gateway TPS Edge router Leased line Third parties FR/X25/ATM FR/X25/ATM A revolution similar to the IT revolution

  18. cv Home Broadband: The connection for future multi-service delivery 2 Home services • New bandwidth- enabled services • Access throughput continuously increasing • Devices capability upgrade and interoperability • Wireless home network Interactive gaming Wireless Surveillance @ Internet Voice over IP Visual phone TV Broadband access Home gateway Security

  19. Printer Enterprise Broadband: Accelerated IT transformation 2 Broadband-enabled centralized ITand network architectures 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 Data processing center Telco datacenter Branch office Broadband WAN/LAN (2-10 Mbps) PCs Printers Laboratory for Interoperability

  20. Wireless: From mobility to ubiquitous accessibility 3 Personal services • Ubiquitous accessibilityto personalized services • Access independent • Contact lists • Extended reachability • Unique authentication Mobile Hotspots Office

  21. Multi-access innovative devices 4 "Home network" • < Entertainment Net New powerful portable terminals X-Box MP3 • Enhanced user interface • New capabilities • Interoperability between home / personal and entertainment / office • Partnershipwith key manufacturers / software vendors • MP3 player with 40 GB hard drive • Can also be used for storage e.g., personal documents, picture albums Digital Video New terminals allowing interoperability Wireless B media adapter • 16 Mb Smart phones • With 2 Megapixels camera • Wireless • Listening to digital music with existing stereo • Digital images on TV • Music and images selection wit remote control and screen menu

  22. Open systems enhancing interoperability of telecom services 5 • Services based on software platforms connected to IP network • Standard APIs • Rapid service deployment • Network independent customer management • Innovative tariffs and products Service platform Transaction systems Customer identifier Transport network • Higher capillarity • Dynamic capacity managements • Lower operational costs

  23. … To • Home communication services • Personal communication services • Enterprise communication services Reshaping France Telecom From… • Access and voice narrowband • Access and voice mobile • Broadband and Internet services • Managed data services Close to local customer, but leveraging global platforms

  24. Delivering on our commitments • Anticipating Industry structural changes • Building momentum for Growth

  25. The engine of France Telecom transformation • World class customer management • Lean operations • High quality customer experience (QoS, Customer Care) • Home communications • Personal communications • Enterprise communications Usage and business model innovation for growth Network and IT infrastructure convergence Operational excellence Strategic partnerships

  26. FT has a unique set of strengths • Over 50 million Homes • Over 50 million Personal • Over 500K Enterprises Customers • Strong R&D capabilities • Complex technology/system integration capabilities • Network deployment capabilities • Service quality culture • Experience in leveraging partnership • Fixed, mobile and internet networks • Strong brands • Global IP network • Presence in 220 countries A committed management team Skills Assets

  27. France Telecom masters technology and leverages it for services innovation • Gateways and home terminals • Handset middleware • User-friendly interface • Identity and authentication • Contact list • Instant messaging • Presence • Reachability • Payment • Security WIFI Soft-switch(voice) 3G 2G Datacon-vergence applica-tions IP backbone Transaction platforms Content • High speed access TPS Third parties • IP networks (IP-VPN, MPLS, QoS, …)

  28. A 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

  29. Growth projects 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 Orange • 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 Transversal • 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

  30. Significant growth coming from better execution Project Examples Orange • Customer mix improvement • Yield management Usage & businessmodel innovation for growth Operational excellence Wanadoo • Churn management • Marketing Spend effectiveness FDF • Sales agency effectiveness • Marketing mix improvement for pro clients

  31. Usage innovation: today’s focus Growth domains highlighted • Ease of use in personal communications • New broadband services • Bandwidth-enabled enterprise IT transformation Usage & businessmodel innovation for growth Operational excellence

  32. Ease of use: Develop usage through seamless use and simplicity Projects IdentityAuthentication A common identity to access all relevant personal services, with strong authentication for trusted access Contacts list A unique contacts list available on any device and network,secured by the identity and facilitating connections Presence Knowing the presence/availability on any networkof someone from my contacts list Reachability The capacity to reach someone on/from any network/deviceaccording to his/her presence Payment A flexible payment of network services and content,secured by identity-authentication

  33. Ease of use milestones & commitments 2004 2005 & over 2003 • Orange contact list in UK Q2 2003 • Single Sign On (SSO) for FT group portals Q2 2004 • Single contact list for fixed and Wanadoo H1 2004 • Voice and video on Wanadoo’Instant Messaging H1 2004 • Seamless fixed, mobile voice mails Q3 2004 • W-HA Common payment indentifier Q3 2004 • Single merchant kit Q3 2004 • Wanadoo-Orange IM interoperability H2 2004 • Automatic call forwarding fixed-to-mobile Q4 2004 • Large scale deployment of payment Q4 2004 • Full interoperable contacts list H1 2005 • Mobile-to-fixed call forwarding H1 2005 • Presence-based contact list H2 2005 • Trusted ID provider H2 2005

  34. Personal VOD telephony Q4 2003 TV on ADSLQ4 2003 Games Broadband:Expanding services Personal Communication Transaction Video telephony Q2 2004 Softwaredownloading Broadband Image messaging Home networking Photo & Video Albums Q3 2003 Personal Content Entertainment Additional revenues based on an available & already invested network

  35. Broadband’s milestones & commitments 2004 2005 & over 2003 • WiFi home router Jun. 2003 • Wanadoo visio trial Q4 2003 • Satellite Internet access Q4 2003 • TV-over-DSL launch in Lyon Dec. 2003 • 3G field test in Lille, Paris & Toulouse Q2 2004 • TV-over-DSL launch in Paris Q2 2004 • Non-PC video-telephony Q2 2004 • Interoperability fixed & mobile video-telephony H2 2004 • 3G full-scale product launch End 04 • Video-over-DSL in foreign subsidiaries 2005 • Target of 10% of pay TV End 2008

  36. Corporate solutions: enhancing enterprise performance through bandwidth enabled IT-transformation Project Examples • Offer employees on the move access to their work environment whatever their devices and networks, and wherever they are Mobile workers • End-to-end management of customer communications needs including PBX, LAN/WAN integration and communications-based applications (messaging & security) Customer premises equipment Outsourcing • Integrated management of networks, IT infrastructure and services

  37. Corporate Solutions’ milestones & commitments 2004 2005 & over 2003 • 1000 wifi hotspots Q4 2003 • Partnership with Accor, AF,… Q4 2003 • Larger salesforce dedicated to IT & C infrastructure services Q4 2003 • Integrated nomadism offers for SME & enterprises in France Q1 2004 • IP centrex offer launch H1 2004 • Convergence of voice VPN and IP VPN Q3 2004 • Nomadism offers available for Equant customers Q3 2004 • Nomadism offers available in the UK Q3 2004 • Business continuity solutions(security data center) Q4 2004 • Nomadism solutions extended to voice and IM H1 2005 • Similar services by FT subsidiaries abroad H1 2005

  38. FT’s Network and IT:Convergence toenable usage innovation Servicesplatforms Availability of consistent services and applications across networks based on open platforms Convergencenetwork Convergence of transport of voice and data over mobile and fixed networks, allowing reduced spending and consistent standard of services IT infrastructure Simplification and convergence of IT operations and key applications such as CRM and content billing across the company

  39. Leveraging strategic partnerships Distributors Technologies • Liberty alliance / Jabber France Telecom Content Equipment and software provider • Gain competitive edge • Ability to integrate technologies • TPS/ TF1 for TV over ADSL • Nortel, alcatel, Nokia on 3G mobile services • Microsoft & Handspring for smartphones • Sony to connect game consoles through ADSL

  40. Conclusion • 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 Objective 2004-5 Higher part of the +3%* to +5%* range

  41. Growth initiatives • Broadband Didier Lombard • Simplicity drives usage Sanjiv Ahuja • Corporate Solutions Barbara Dalibard

  42. B r o a d b a n d • Didier Lombard

  43. 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.

  44. Broadband: a key market for FT Broadband Today Strong leadership from the beginning Over 3m lines installed In France end of 03 2m Wanadoo customers in Europe (end of Q3)

  45. Broadband: a key market for FT Broadband Opportunity Higher Speed Better Coverage Expanding Services

  46. 14 000 400 12 000 350 10 000 300 8 000 250 200 6 000 150 4 000 100 2 000 50 0 0 1999 2000 2001 2002 2003 2004 2005 1999 2000 2001 2002 2003 2004 2005 Higher Speed Mobile Downstream / Upstreambit-rate(kbits/s) Fixed offered bit-rate(kbits/s) 450 A constantly rising speed provided on both Fixed & Mobile

  47. Satellite Satellite access network WiFi Access Point HUB Satellite gateway Household Better Coverage 100% Coverage with Wifi & satellite ADSL Coverage French Market Full broadband nation-wide coverage by 2005

  48. Video UMTS telephony Video PC, non PC Telephony Personal Image telephony messaging Image TV on messaging Games ADSL VOD Photo albums Expanding Services Telephony + Mobile + Broadband Home networking Internet + Image Additional revenues based on a available & already invested network

  49. TV over DSL in France • Key customer benefits : • Access to TPS* pay TV • Wide choice, easy to search, order & watch TV contents • Better quality image thanks to guaranteed bit rate More valuefrom samenetworks • Key France Telecom benefits : • Develop ARPU on consumer market • Apply unique technical expertise in video technologies • No additional cabling required (standard ADSL) * Non-exclusive agreement Leverage attractive content to build up ARPU

  50. TV over DSL milestones TVoDSL commercial rollout in Lyon late Dec. 2003, then Paris in Q2 2004,and progressively reach in other French cities Short Term Approx. 25,000 customers by end 2004 Develop partnerships with multiple TV content providers Medium Term • Target 10% of pay TV market by 2008

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