France Telecom reported Q1 revenues of EUR 11.376, an increase of 7.3% compared to the year-earlier period. There was an increase in operating free cash flow to EUR 3.1 billion in Q1, compared to EUR 1.9 billion in Q1 2002. On a comparable basis, France Telecom's consolidated revenues increased 3.3% annually. Some highlights for the quarter:
- The number of broadband lines for retail customers (including Wanadoo's ADSL access) was 1,777,000 at the end of the quarter, more than triple the year earlier count. FT is targeting 2.8 million ADSL customers by the end of 2003. While describing DSL as a principle growth driver, FT noted that Minitel revenues continued their downward trend.
Fixed line, voice and data services in France decreased 6.6% for Q1, compared to the year-earlier period, related in part to the sale of some network assets. Without the sale, the comparative decline would have been 3.4%. For Q4 2002, the annual rate of decline was at 5.7%. As a result, FT believes the impact of the opening of the local communications market to competition is slowing. France Telecom's market share in local traffic in March 2003 amounted to 79.1% compared to 86.0% in March 2002. In comparison, France Telecom's market share in local traffic in December 2002 amounted to 80.9% compared to 96.8% in December 2001.
France Telecom's market share in long distance traffic (domestic and international) remained stable at 63.3% in March 2003 compared to 63.7% in March 2002.
Contributive revenues from Equant decreased 22.6% on a historical basis and 5.1% on a comparable basis compared to the year-earlier period. For the most part, the decrease reflected the impact of the transfer of Equant's customers in France to Transpac SA in accordance with the contractual provisions put in place in June 2001 at the time of Equant's consolidation into the France Telecom group. Sales in network services, which represented more than half of Equant's revenues, increased 3.7%.
The FT group reduced its CAPEX in Q1 by EUR 350 million. Most of the reductions came from fixed line operations in France (47%), Orange (32%), Wanadoo (10%) and fixed line operations outside of France (11%). The company plans a 19% increase in investment expenditures in ADSL to double the number of lines in France in 2003.
