Our mobile operations are benefiting particularly from strong growth in emerging countries, said chairman and chief executive Didier Lombard. Their dynamism, generated for the most part by a low penetration rate, makes these markets an important growth engine for the group.
In March the French carrier revealed that annual net income had fallen 25% to 4.7bn euros ($6.2bn) on revenue 7.5% higher at 51.7bn euros ($67.7bn). Income had been hit by impairment of goodwill and an increase in restructuring costs.
Meanwhile, media speculation has centered on the French carrier acquiring a stake in Italian carrier Telecom Italia. Earlier this month, US carrier AT&T ended negotiations to potentially acquire a stake in the holding company of the Italian carrier. The US mobile giant had entered negotiations with Italian company Pirelli, which controls 80% of the strategic important TI holding company Olimpia.
However, once it became clear that the deal was being opposed not only by Italian trade unions but also the Italian government, AT&T decided to withdraw. The Italian government is keen for the carrier to remain in Italian, or failing that, European hands.
Days later, Fininvest, the Italian holding company for the multimedia empire of former Italian premier Silvio Berlusconi, also denied that it was in talks for a stake in Italian carrier.
Now it seems that France Telecom has also ruled out any move toward taking an indirect stake in the Italian carrier. Both the Associated Press and the FT newspaper quoted France Telecom’s CFO Gervais Pellisier as saying that FT was not interested in big mergers, in response to a question about TI. However, he did say it might be interested in forming some kind of industrial partnership with its Italian rival. This would be similar to the network sharing deals that Orange has entered into with Vodafone in Spain and the UK.
France Telecom also confirmed that Sanjiv Ahuja, the head of mobile unit Orange, is to step down in order to pursue a series of new ventures with the aim of exploring some of the fascinating opportunities that I believe this sector still holds. Ahuja will remain as chairman of Orange UK, and as an adviser to Didier Lombard, who paid fulsome tribute to his departing colleague. He is expected to be replaced by Olaf Swantee who is currently a senior vice-president at Hewlett-Packard.
France Telecom stuck to its guidance for 2007, keeping organic cash flow at 6.8bn euros ($9.25bn), adjusted for the disposal of directory service Pages Jaunes at the end of 2006. It confirmed it plans a dividend of 1.20 euros ($1.63) a share.
