The strategy plan for 2006 through to 2008 is known as Next (New Experience in Telecom services). The new offerings include combined mobile and internet access, remote surveillance of the home through a mobile phone or computer, as well as LiveMusic, a wireless transfer of music from computers to home-based sound systems.

The operator repeated a forecast for 2005 sales to rise between 3% and 5%, and gross operating profit of more than 18.5bn euros ($22.38bn).

Chief executive Didier Lombard also pledged to continue the carrier’s policy of debt reduction, and repeated an outlook for net debt to be less than 2.5 times gross operating profit by the end of the year. The carrier said it would more than double its dividend for 2005 to 1 euro ($1.20) per share from 0.48 euros ($0.58) last year.

Lombard also said it would now look at a selective acquisition strategy. This commitment to seek further acquisitions is concerning considering the carrier’s enormous debt pile. Debt levels at France Telecom recently rose alarmingly after the carrier adopted International Financial Reporting Standards instead of French GAAP. Its debt has risen by 6bn euros ($7.7bn) to a staggering 49.9bn euros ($64.48bn), as it conforms to the new accounting rules.

It built up its vast debts as a result of a reckless expansion strategy in the late 1990s that saw debt peak at 68bn euros ($87.87bn) in 2002. This led to questions over the carrier’s viability, and it took a state aid package from the French government, plus a change of management and massive job cuts to get the carrier back on its feet.

In early June, the French government reduced its holding in the carrier, but demand was so weak for the shares that the banks underwriting the offer have been apparently left holding an unspecified number of shares that will have to be sold at a later date.

The French state had been hoping to sell between 6% to 8% of the carrier in order to raise 3.5bn euros ($4.30bn) to 4.53bn euros ($5.56bn) for the state coffers. However, poor demand for the stock meant it was only able to sell a little over 6%, which raised only 3.4bn euros ($4.19bn).

Over the next 18 months, France Telecom will increasingly adopt the Orange name as its international commercial brand for mobile, broadband, and multiplay offerings, as well as for all enterprise businesses. The carrier’s name however remains unchanged.

It is targeting more than 12 million clients for broadband fixed-line connections by 2008, including more than 8 million subscribers for its Livebox wireless device, with which users can link their telephone, TV, and internet using Wi-Fi. The Livebox target includes 6 million users in France. It also expects more than 12 million customers by 2008 for broadband mobile services, which include so-called third-generation services, including 6 million in France and 5 million in the UK.

France Telecom is hoping to gain more than 1 million subscribers for MaLigne TV in France, its offering for television via the internet, with more than 400m euros ($483m) in revenue from direct paid content.