Cloudcall Share Discussion Threads

[waldron] 09/2/2005 15:45

Bouygues appeals EU state aid decision vs France Telecom as too lenient

BRUSSELS (AFX) - Bouygues SA and French telecommunications industry body
AFORS have appealed the European Commission's state aid decisions against France
Telecom SA last year on the grounds that they are too lenient, according to the
European Court of Justice.
The court said Bouygues and AFORS were unhappy that the commission did not
classify some of the assistance to France Telecom as state aid and therefore did
not ask for it to be repaid.
Earlier, the court said France Telecom and the French government were
appealing the decisions taken by the commission on Aug 2.
Under the ruling, the telecom operator was ordered to pay back to the French
state an amount estimated at between 800 mln eur and 1.1 bln eur plus interest.
It was also deemed to have received state aid in the form of a shareholders'
advance from publicly-owned ERAP.
[e-mail]
ed/vm/tc

[waldron] 09/2/2005 10:15

BRUSSELS (AFX) - France Telecom SA and the French government are appealing
state aid decisions taken against the company by the European Commission on Aug
2, according to the European Court of Justice.
The telecom operator was ordered in August to pay back to the French state
an amount estimated at between 800 mln eur and 1.1 bln eur plus interest. It was
also deemed to have received state aid in the form of a shareholders' advance
from publicly-owned ERAP.
[e-mail]
ed/lam

[ariane] 03/2/2005 13:04

BRUSSELS (AFX) - European competition commissioner Neelie Kroes said her
proposals to reform state aid rules to cut back on government subsidies will not
discriminate against different nations.
Speaking at the European Parliament, Kroes said: "Regional aid will have to
be targeted much better on regions most in need ... we must also guarantee that
there is no discrimination between otherwise similar regions just because they
happen to be situated in different member states."
The reformed rules should also be less onerous, Kroes said. "I want to
promote imaginative solutions to improve the regulatory environment and cut
unnecessary red tape. I believe there is room for simplifying the rules and
making them more efficient and user-friendly."
Kroes also discussed reform of EU antitrust rules. She said she would like
to explore the idea of a one-stop shop for leniency applications in cartel cases
where the first company to blow the whistle on a cartel is granted full immunity
from fines. Different regimes exist in different member states.
She will also continue to promote the proposals of her predecessor Mario
Monti who wanted to see private actions brought against companies that breach
antitrust rules. She said she will present a green paper to set out ideas for
facilitating these actions.
Proactive policy is another goal of Kroes, who reiterated that she plans to
launch sector inquiries into industries where the commission suspects that
competition might not be functioning as well as it should. She said: "We will
focus on those sectors which have the greatest impact on overall
competitiveness, such as transport, energy and financial services."
Last week, director-general for competition at the commission Philip Lowe
said his department plans to launch two to three probes a year and expects to
open investigations in the banking and insurance sectors.
She said her competition department will also screen legislation, both at
the EU and national level, to identify any measures that could have a harmful
impact on competitiveness and consumers. "At the European level, the commission
will systematically test the impact of new legislative proposals on
competition."
[e-mail]
ed/cmr

[waldron] 24/1/2005 19:38

LONDON, January 24 (newratings.com) - Analysts at Dresdner Kleinwort Wasserstein maintain their "buy" rating on France Telecom (FTE.ETR). The target price is set to €29.00.

In a research note published this morning, the analysts mention that the French regulatory authorities have permitted the company to raise its line rental fees by 23% over the next four years. Dresdner Kleinwort Wasserstein expects the fee hike to boost France Telecom's 2005 revenues by €350 million. The company has acquired a 46% stake in Equant for €564 million in cash, the analysts add.

[maywillow] 19/1/2005 11:22

BRUSSELS (AFX) - The European Commission said it has opened an investigation
into the UK government's application of favourable property tax rates to BT
Group PLC and Kingston Communications.
The commission said the Valuation Office Agency, part of the UK government,
applies different valuation methods for taxation purposes to BT and Kingston
than to their competitors. These competitors end up paying more tax.
The commission said: "The application of different methods may favour BT and
Kingston resulting in a disproportionate tax burden for other companies
competing in the market for electronic communications services."
Tax benefits that only apply to certain companies may distort competition in
the market by giving those companies an unfair advantage over their rivals. The
UK tax breaks for BT and Kingston could be illegal under EU state aid rules.
[e-mail]
ed/

[grupo] 12/1/2005 12:54

PARIS (AFX) - France Telecom was ordered to pay a 40 mln eur fine by a Paris
appeal court for refusing to lower ADSL access rates for third-party internet
service providers, in a case that was first brought against the company in 1999
by rival 9 Telecom.
The French Competition Council first found France Telecom guilty of
anti-competitive practices in May 2004, when it imposed a 20 mln eur fine, but
France Telecom appealed the decision.
[e-mail]
afp/js/cmr

[waldron] 31/12/2004 08:17

PARIS (AFX) - France Telecom is negotiating with the government and with
telecoms regulator the ART to increase subscription rates by 20 pct over the
next three years, financial dailies La Tribune and Le Figaro reported.
France Telecom declined to comment on the report.
The company is offering a reduction of 5 pct in local calls to offset the
increase, La Tribune said.
Le Figaro said that both industry minister Patrick Devedjian and the ART are
sceptical about an incerase, but are ready to give ground in return for
concessions on tariffs.
nth/jad/jlw

[grupo guitarlumber] 16/11/2004 07:53

PARIS (AFX) - Share prices are expected to open slightly higher, supported
by the continued easing of oil prices, dealers said.
Yesterday, the CAC-40 index closed down 14.14 points at 3,820.97, as
investors locked in recent gains after a subdued performance on Wall Street.
On the Matif, November CAC-40 futures were trading up 9.5 points at 3,836
ahead of the official opening.

FORTHCOMING EVENTS
TODAY
-Dexia Q3 results
-Marionnaud Parfumeries news conference on H1 results
-Wavecom AGM

TOMORROW
-Vivendi Universal Q3 results, conference call
-Credit Agricole Q3 results

TODAY'S PRESS
-Bouygues Telecom to appeal EU ruling on state aid to France Telecom (Les
Echos)

COMPANY NEWS
-Bouygues unit Colas wins 8 contracts worth over 350 mln eur in total
-Geophysique Q3 net loss 3.2 mln eur vs pre-ex loss 6.5 mln

MACROECONOMIC NEWS/POLITICS/MISCELLANEOUS
-ECB's Noyer says ECB will not let oil price inflation lead to knock-on
effects
-Eurostar to shift London operation from Waterloo to St Pancras in 2007
[e-mail]
js/cmr

[waldron] 24/9/2004 07:05

Telecoms

The marriage of two phones

Sep 23rd 2004


New technology will abolish the difference between fixed and mobile phones



IS THE fixed-line phone a dead duck? Look at the numbers and the trends, and you might well conclude that it is. Mobile phones now outnumber fixed ones, and their numbers are growing fast, while the number of fixed lines is flat globally and declining in many countries. An increasing number of people, including 5% of Europeans, are "cutting the cord" and going entirely mobile, doing away with their fixed lines altogether. And while fixed-line phones have hardly changed in years, mobile phones have many handy features, such as the ability to store dozens of names and numbers, not to mention text messaging and other services.

Yet fixed-line phones do have their advantages. Calls are cheaper and clearer, and connections are much more reliable, as anyone who has trouble getting a strong mobile signal indoors will testify. Hence the current enthusiasm throughout the telecoms industry for the idea of "fixed-mobile convergence", which uses clever technology to provide the best of both worlds: the freedom of mobile and the reliability and low cost of fixed lines. Subscribers use the same handset to make calls via fixed lines at home, and mobile networks when out and about: they have one number and one voicemail box, and receive one bill.


Behind the scenes, this involves some clever tricks. Calls are handled within the home by a small base-station plugged into a fixed-line broadband-internet connection. This base-station communicates with nearby handsets using radio technology that operates in "unlicensed" spectrum, such as Bluetooth or Wi-Fi (so you will need a new handset). The base-station pretends, in effect, to be an ordinary mobile-phone base-station. As you enter your house, your phone "roams" on to it. When you make a call, it is routed over the broadband link, which has enough capacity to handle several calls at once by different members of the household. Calls made in this way are billed as fixed-line calls. If you leave the house while making a call, you roam seamlessly back on to the ordinary mobile network. And when a friend comes to visit, her phone roams on to your base-station, but the charges for any calls made appear on her bill.



Great expectations
For fixed-line operators such as BT, Britain's telecoms incumbent and one of the leading proponents of fixed-mobile convergence, the appeal of this approach is obvious: rather than losing out to mobile phones, fixed lines can now co-operate with them, and win back some traffic. After selling off its wireless arm a few years ago, BT has re-entered the mobile market by reselling airtime on other operators' networks; most recently, it has formed a partnership with Vodafone. A converged fixed-mobile service will enable BT to lower costs by shifting some mobile calls on to its fixed network; it will also allow the company to differentiate itself from mobile-only operators.

So-called integrated operators, which own both fixed and mobile networks-such as Germany's Deutsche Telekom and Japan's NTT-also like the idea of fixed-mobile convergence. They can save money by merging network infrastructures and doing away with separate fixed and mobile divisions. France Telecom, for example, is reorganising itself into consumer and business divisions, rather than fixed and mobile. And Cingular, an American mobile operator owned by two fixed-line incumbents, BellSouth and SBC, is pursuing convergence as a way to improve coverage within buildings, and thus exploit fixed networks to gain a competitive advantage over other mobile operators.

Even mobile-only operators are getting involved, and making deals with fixed-line providers. Fixed-mobile convergence could help them fill the excess capacity on their 3G networks, and enable them to unload calls on to cheaper fixed networks where possible, to reduce costs. In short, everyone in the telecoms industry seems to like the idea, because they hope it will expand the market overall. Once people get into the habit of carrying their mobile phones around with them at all times, even in the home, they will probably make more calls. Vendors love the idea too, notes David Brown of Motorola, the world's second-largest mobile-handset maker, because as well as requiring lots of back-end equipment, fixed-mobile convergence presents the opportunity to replace a billion or so existing fixed-line phones.

It all sounds great, which explains why the idea of fixed-mobile convergence has been around for several years. But it is only now gaining any traction. One reason, says Niel Ransom of Alcatel, a telecoms-equipment maker, is the success of mobile phones: fixed-mobile convergence only makes sense if everyone has their own handset, which they now do, in the rich world at least. It is also now possible to cram multiple radios (one for mobile use, and one for use within buildings) into a single handset without adding much to its cost or size. But perhaps most important of all is the emergence of technical standards. This month a consortium of operators and suppliers, including Alcatel, BT, Cingular, Ericsson, Motorola, Nokia, Nortel and T-Mobile, announced specifications for integrating wide-area mobile with short-range Bluetooth and Wi-Fi networks. An agreed standard means that operators can proceed without the risk of being locked in to a particular technology.

Most observers agree that BT is the operator to watch. In July it co-founded an alliance of operators called the Fixed Mobile Convergence Alliance, the other members of which include NTT, Brasil Telecom and Korea Telecom. BT's trailblazing fixed-mobile convergence technology, known as "Bluephone", is being developed by a seven-company consortium that includes Alcatel, Motorola and Ericsson, and is being closely watched by other operators. "If I go anywhere in the world, and talk to any operator, they want me to tell them about Bluephone," says Mr Ransom. "They've all got their eye on it, and they will all be watching BT very carefully to see how this works." Now that technical standards have been agreed and handsets are becoming available, BT expects to start trials of Bluephone in December, in preparation for a launch next spring.

The big unanswered question is: do consumers actually want these new converged phone services? BT plans to market Bluephone on the basis that it is a simplifying technology, yet explaining exactly how it simplifies things is not easy. "Education is needed, and a focus on simplicity," says Andrew Cole of A.T. Kearney, a consultancy. One way to think of fixed-mobile convergence, he suggests, is that it brings the features of mobile phones into the fixed environment. Market research shows that people are receptive to the idea, he says, particularly if it means lower prices.

If Bluephone proves a success in Britain, it is likely to trigger the launch of similar services elsewhere. Mobile-only operators may then rush to team up with cable operators in order to compete, since being a mobile-only or fixed-only operator will no longer be viable, says Lars Godell of Forrester, a consultancy. More companies might also follow the lead of France Telecom, and merge their fixed and mobile divisions. The historic distinction between the two types of telephones would vanish. If all of this comes to pass, the terms "fixed" and "mobile" could become anachronisms within a few years.

[maywillow] 01/9/2004 09:03

Paris to sell telecom group stake


The French Government is to sell part of its stake in France Telecom to help reduce national debt, the finance ministry has said.
The government said it was selling 9.6% of its shares in the group, but may raise it to 12.1% depending on demand.

The sale will raise at least 4.58bn euros ($5.5bn; £3.1bn) based on the firm's closing price on Tuesday.

The news came as France Telecom unveiled plans to raise up to 1.15bn euros with a convertible bond issue.

France Telecom said the bond issue would help to shore up the company's finances.

Future development

The stake sale is part of wider efforts by the French Government to sell off state assets to lower the budget deficit.

The French finance ministry added that it planned to remain a major shareholder in the group in the medium term, retaining a 41-43.5% stake.

It said the sale would allow France Telecom to increase margins "to adapt to the future development of the telecommunications markets" and will ensure it has a "more flexible capital and an enlarged investor base".

The telecommunications group has faced a tough time financially in recent years - with the government bailing it out with 9bn euros in state credit during a financial crisis in 2003.

The firm is facing a 1.1bn euro bill for state aid it received by not having to pay some tax bills between 1994 and 2002.

In July, following a year-long investigation, the European Commission ruled the firm should repay the cash as the aid was incompatible with competition rules.

[maywillow] 01/9/2004 07:37

(Updating with additional comment from government, stake valuation)
PARIS (AFX) - The French government said it plans to sell a 9.6 pct stake or
236 mln shares in France Telecom SA, which may be raised to 12.1 pct depending
on demand, to reduce public debt.
The government will sell up to 299 mln shares via a placement to
institutions and will hold 41.0-43.5 pct of the French telecoms operator after
the operation.
It said it plans to remain a major shareholder in France Telecom in the
medium term.
The government's stake sale is worth 4.6-5.8 bln eur based on yesterday's
closing price, depending on the precise number of shares sold.
In addition, France Telecom will propose at a board meeting this morning to
sell 1.0-1.15 bln eur of convertible bonds, the French government said.
The government said the stake sale will allow France Telecom to increase
margins "to adapt to the future development of the telecommunications markets"
and will ensure it has a "more flexible capital and an enlarged investor base."
The government said France Telecom's stable financial situation and recent
buyout of Orange and Wanadoo means the operator can now take full advantage of
developments in the telecoms market.
Shares will be offered subsequently to France Telecom existing and former
employees.
[e-mail]
sr/hjp

[grupo] 01/9/2004 07:09

France to Sell $7.1 Billion Stake in France Telecom (Update2)
Sept. 1 (Bloomberg) -- The French government plans to sell a stake in France Telecom SA worth about 5.8 billion euros ($7.1 billion) to reduce debt that exceeds European Union limits.

The state will sell to institutions as many as 299 million shares, or 12.1 percent, in Europe's second-largest phone company, the finance ministry said in a statement. France will hold between 41 percent and 43.5 percent after the sale, bringing its stake below 50 percent for the first time.

Finance Minister Nicolas Sarkozy has pledged to reduce debt that's reached a record 63 percent of gross domestic product after almost 30 years of accumulated deficits. In June the French government sold 35 percent of Snecma SA, the state-owned maker of aircraft engines, raising 1.15 billion euros.

``The state intends to remain a major France Telecom shareholder in the medium term,'' the statement said.

European governments are depending on asset sales to help close budget gaps, and plan share offerings for Electricite de France, Deutsche Telekom AG and Italy's Enel SpA.

France Telecom will also sell convertible bonds worth as much as 1.15 billion euros to improve its balance sheet, the statement said. The company will offer stock to workers on preferential terms at a later date.

Shares of France Telecom yesterday dropped 2.3 percent to 19.43 euros, valuing the company at 47.9 billion euros.

[ariane] 27/8/2004 09:09

Vivendi tax deal stymies Vodafone's plans for SFR

Mark Milner
Friday August 27, 2004
The Guardian

Vodafone's hopes of acquiring SFR, the mobile phone subsidiary of Vivendi Universal, suffered a blow yesterday after the music and television group reached a 3.8bn euro (£2.5bn) tax deal with the French government.
Vivendi has been granted a new tax status which will allow it to reduce its future tax bills by offsetting profits, including those from SFR, against some 11bn euros of historic operating losses. The move increases SFR's value to Vivendi.

Though the new system operates on a group-wide basis, analysts at investment bank Dresdner Kleinwort Wasserstein note that while SFR will still pay 100% of its tax obligations, "Vivendi will be able to recoup 56% at the parent company level".

Under the previous regime Vivendi could only use the tax offset on profits from companies where it had a stake of at least 95%. Under the new consolidated global profits tax system the threshold is reduced to 50%.

Vivendi has a 56% stake in SFR, while Vodafone has the remaining 44% and is known to be interested in buying Vivendi's stake if it comes up for sale.

"The ruling makes SFR more valuable to Vivendi and increases the price of Vivendi's stake for Vodafone. This makes a deal less likely and more difficult for Vodafone to justify as additional synergies are limited."

Industry sources noted that the impact might only be short term, with other factors influencing the way Vivendi treated its tax windfall - using profits on other businesses against the tax losses, for example.

Yesterday Vivendi reiterated that its SFR stake was not for sale. A Vodafone spokesman said: "When and if Vivendi wanted to sell and we got into talks then we would have to assess the situation at that time in order to gauge the worth of the business.

"We would only pay what we considered to be a sensible price at that time."

The new tax regime will save Vivendi 500m euros this year and some 3.8bn euros over the next seven years.

However, Vivendi would have to apply to renew its tax status after five years. Vivendi made its initial application in December last year.

Vivendi has also agreed with the finance ministry that it will set up two call centres in areas of high unemployment in eastern France which will employ 300 people each. The company said yesterday that it needed to increase its call centre facilities.

It has also committed itself to spending a further 5m euros a year over the next five years to help create another 1,500 jobs, again in eastern France.

Vivendi said the jobs initiative was "in parallel" with the tax deal. Such tax arrangements were "not unusual".

"Other companies have had them. It is not as if we have been shown any favouritism," said a spokeswoman.

The deal comes amid reports that Nicolas Sarkozy, the French finance minister, is preparing to introduce tax breaks designed to discourage companies from outsourcing abroad and to reward them for bringing jobs back to France.

[maywillow] 11/8/2004 06:43

Harsh reality of virtual networks
By Robert Budden
Published: August 10 2004 21:31 | Last updated: August 10 2004 21:31

The growth of mobile virtual network operators, who use leased network capacity from an existing carrier, is presenting leading mobile phone operators with a dilemma. Long-established operators who shun wholesale deals with new entrants will be cutting off a potentially lucrative revenue stream. But those that sign deals with powerful brands could be introducing fierce, potentially destabilising competitors into the mobile market. Some of Europe's leading entrepreneurs are already eyeing the expanding mobile phone sector as their next big area for growth. Now, following the flotation in July of Virgin Mobile in the UK, it is the virtual mobile operator model that is attracting their interest. Stelios Haji-Ioannou, founder of the Easy Group, Charles Dunstone, chief executive of Carphone Warehouse, and Richard Branson, head of the Virgin Group, are all considering new markets that would be ripe for virtual mobile arms. Mr Haji-Ioannou has ambitions to launch cut-price virtual mobile services across Europe and is understood to be in advanced discussions with potential carriers for voice calls in a number of European countries, including the overcrowded UK market. Mr Dunstone is exploring opportunities for further mobile arms throughout Europe following the creation of its new virtual operator arm in France in conjunction with Orange. Mr Branson's Virgin Group is in advanced talks with an established mobile operator in China that are likely to see the creation of a new Virgin-branded mobile operator in the country before the end of the year. Virgin is also looking at launching more mobile businesses in several other markets, from India to Mexico. The interest from these leading entrepreneurs is a strong sign that plenty of opportunities remain for the mobile virtual network operators (MVNO) business model, despite saturation of many western European mobile markets and the existence of several successful virtual operators in countries such as Denmark, the UK and Norway. Indeed, this interest is stretching to include many leading retail brands, particularly those with strong distribution outlets, which hope to grow revenue per customer and increase customer loyalty. Many operators across Europe are indicating they are having discussions with new entrants about setting up new mobile arms. "There have been a number of studies showing that the more products a customer has from one provider the more loyal they become," explains Charles Walker, head of business development at Servista, a company that helps new entrants launch and manage mobile operations. The MVNO is also seen as a relatively simple way of extending brands into new markets without investing huge sums. Running a virtual operator means new entrants are not required to stump up hundreds of millions of dollars building infrastructure. The virtual operator model allows them to piggy-back on the networks of established operators by buying voice capacity at reduced wholesale rates. Most MVNOs successes have targeted lower-spending pre-pay users where upfront costs such as handset subsidies tend to be low. There are also attractions for established operators, many of whom see the MVNO as a means of winning customers outside their core target markets. MMO, BT Group's former mobile arm, has sought to expand its consumer appeal without damaging its existing brand through its tie-up with Tesco, the supermarket group in the UK, and its deal with Tchibo, the coffee shop chain in Germany. "MVNOs give us access to the types of customers that might not have been top priority for us to go after," explains Sohail Qadri, director of strategy at MMO. MMO has teamed up with trusted brands that do not compete with its own marketing campaigns. While O, its consumer brand, scores well among the youth market and higher spending early users, Tesco Mobile and Tchibo will be aimed at family users. Regulators in some markets see the virtual model as a way of fostering new competition. Already two new entrants - Carphone Warehouse and Debitel, the German telecoms operator - have set up virtual arms in France following encouragement from ART, the telecoms regulator. Orange, France Telecom's mobile arm, has said it is in discussions to sign up more brands to offer virtual mobile services. This surge in interest is likely to increase competitive pressures on the established mobile operators, some of which are already starting to lose customers to new entrants such as 3, the mobile operator controlled by Hong Kong's Hutchison Whampoa, which is winning market share on the back of cut-price voice tariffs. Some analysts fear that new entrants such as Easy Group could destabilise the fragile dominance of some of the leading operators. Easy Group intends to avoid expensive handset subsidy costs by just selling SIMs, the smart cards inside mobile phones that identify and authenticate users, to consumers who already own a mobile phone. Easy Group is also likely to slash distribution costs by selling SIMs only over the internet, allowing it to pass on more cost savings to the consumer. A similar model adopted by new entrant Telmore in Denmark has transformed the market by allowing it to undercut the charging models of the established operators by as much as 60 per cent. Established operators have been forced to respond with their own price cuts to stem customer defections. Even so, Telmore and rival Tele2 have captured a 20 per cent market share, making Denmark the most successful market for virtual operators in Europe. Price is only one element of the equation. Analysts say brand is vital for any new entrant wanting to make its mark as a mobile operator. Even apparently invincible global brands can come unstuck if they fail to get their customer proposition right. Despite success in the UK and early advances in the US, Virgin Mobile was forced to pull its joint venture in Singapore with local operator Singtel, partly because its brand did not translate well to the local market. "Having an easy, friendly and trusted brand appear to be essential traits for an MVNO," says Tom Russell, partner in the telecoms practice at Mercer Management Consulting. Mr Qadri predicts more MVNOs will enter the market but says many will find the market tough. "What has happened is that everyone's aunt and uncle is interested in MVNOs at the moment," he says. "But with one success you'll probably have 200 failures. When [MMO] had our discussions with Tesco we realised here was a trusted brand that had a reputation for delivery and a strong distribution network - the keys to success." But virtual operators' relatively low fixed-cost base means profitability is possible without winning a huge slice of the market. In many markets, there is likely to be room for several MVNOs, some with low single-digit market share.

[waldron] 27/7/2004 07:34

PARIS (AFX) - France Telecom confirmed its 2004 and 2005 sales and earnings
targets, as first half EBITDA and sales came in in line with analyst estimates.
First-half EBITDA was 8.9 bln eur, up 4.5 pct from 8.5 bln a year earlier,
on sales of 23.2 bln, up 1.4 pct from 22.9 bln.
Analysts expected EBITDA of 8.78-8.950 bln eur on sales of 22.94-23.304 bln
eur.
The company confirmed it expects sales to grow between 3-5 pct pro forma in
both 2004 and 2005.
It still expects EBITDA of over 18 bln eur in 2004 and an EBITDA margin of
40 pct in 2005.
The net debt to EBITDA ratio is stil expected to be between 1.5-2.0 times in
2005.
At end-June net debt was 48 bln eur, down from 49.3 bln a year earlier.
[e-mail]
mrg/cmr

[grupo guitarlumber] 20/7/2004 19:00

(updates with comments from government, France Telecom)
PARIS (AFX) - The government said it will use all means to contest the
European Commission's verdict today ordering France Telecom to pay back 800 mln
- 1.1 bln eur in back taxes.
France Telecom said separately it will appeal against the fine.
The Commission said after interest is added, the total sum that must be paid
amounts to 1.2-1.7 bln eur.
The Commission also ruled the company had received more aid in the form of
verbal support and a 9 bln eur credit line from the government but said it would
not demand repayment.
The finance ministry said it regrets that the Commission "did not take in
the arguments (...) put forward to contest the existence of any form of state
aid in these matters."
Concerning the question of back taxes, the ministry said "according to
concurring financial assessments, the professional tax regime (...) did not lead
to any under-taxing of France Telecom in relation to its competitors".
Regarding the question of a supposed verbal guarantee, the ministry said the
comments in question, dating from the end of 2002, "conform to the regulations
pertaining to state aid."
In a separate statement, France Telecom said the Commission is not in any
case qualified to give an estimate regarding back taxes.
It said that after 18 months of investigation and reports, "The commission
seems to have made its decision in an imprecise manner and in a climate of
confusion generated by multiple leaks rumours and public statements that are
premature at the very least."
The company reiterated its belief that the Commission's points are without
legal or economic foundation and welcomed the support from the French state, its
majority shareholder.
[e-mail]
mrg/jsa

[grupo guitarlumber] 20/7/2004 15:43

BRUSSELS (AFX) - The European Commission said France Telecom SA must repay
back taxes amounting to between 800 mln and 1.1 bln eur to the French state.
The commission said the company had also received further aid in the form of
verbal support and noted that the French state had made available a credit line
amounting to 9 bln eur for the beleaguered operator.
However, the commission said France Telecom will not have to repay any of
the credit line.
The commission said it has also dropped a complaint brought by rival
company, Bouygues Telecom SA which said France Telecom had been given favourable
terms by the French government when UMTS (third generation mobile phone)
licences were granted.
[e-mail]
ed/jsa

[maywillow] 19/7/2004 14:48

BRUSSELS (AFX) - European competition commissioner Mario Monti might delay
the announcement of his decision on state aid given to France Telecom SA, which
is expected tomorrow, because the investigating team has still not settled in
its case against the telecoms giant, according to a source in the commission.
Monti might cancel tomorrow's press conference at the European parliament
where he was set to announce the conclusion of the commission's probe, the
source said.
According to reports last week, Monti was preparing to ask France Telecom to
reimburse 1.1 bln eur of tax benefits it received from the French state between
1994 and 2002.
But on the advice of commission lawyers, he was also set to call a halt to a
different probe into a further 9 bln eur of state aid, made up of verbal
guarantees given by the French government which boosted the company's credit
rating.
"Everything is still under discussion," said the commission source, who said
the commission's case was still not finalised.
[e-mail]
aud-afp/adp/cmr

[ariane] 15/7/2004 12:06

PARIS (AFX) - The European Commission will on Tuesday rule on the 1.1 bln
eur of state aid said to have been received by France Telecom SA, but while it
believes additional state aid was given, it does not intend to open a further
probe, sources close to the matter said.
The source added that the 1.1 bln eur has been questioned by the commission,
which has decided to hand the exact amount back to the French authorities.
"The 1.1 bln eur has been questioned by the cabinets in Brussels," the
source said.
"The French now say that the amount should be recalculated, so the
commission will tell them they can calculate it themselves because the
commission can rule that aid has been given, but it does not need absolute
certainty in the amount," the source added.
On the 7 bln eur state aid, the source said: "The French say no money has
changed hands, and this is a resourceless state aid."
At the start of July, AFX News revealed that the commission planned to make
the company pay back 1 bln eur in tax, and that it would also open a new probe
into a further 7 bln eur.
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ed/sr/cmr

[ariane] 15/7/2004 06:58

BRUSSELS (AFX) - The European Commission's plans to rule that France Telecom
has benefited from illegal state aid have run into problems because of
objections by the commission's own lawyers, the Financial Times reported.
As a result, the case may take longer to resolve than had been expected, and
a cap may be placed on any amount that France Telecom has to repay.
The Commission's legal service is particularly uncomfortable with officials'
attempts to place a monetary value on government statements of support for
France Telecom, the newspaper said, without naming sources.
At the start of July, AFX News revealed that the commission planned to make
the company pay back 1 bln eur in tax, and that it would also open a new probe
into a further 7 bln eur.
That was the theoretical monetary value attached to a pledge by Francis Mer
when finance minister, to maintain the company as a going concern.
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jms

[ariane] 09/7/2004 13:28

BRUSSELS (AFX) - The European Commission has delayed its decision on the
state aid given to France Telecom SA after France intervened in the case in a
last-ditch attempt to get a more favourable outcome, said a source close to the
case.
AFX News revealed last week that the commission planned to go ahead with its
decision to make the company pay back 1 bln eur in tax, and that it will open a
new probe into a further 7 bln eur. This decision was expected on July 14.
The commission has now put back its decision to July 20 at the earliest, but
may even leave the case open until after the commission's August break.
"The French and the commission need more time to haggle. The decision could
be on the 20th or it might be after the summer break," said the source.
France's intervention in the case could force the commission to take a more
lenient approach.
"For now, this delay is just a calendar issue but it is possible that the
French could potentially affect the outcome," said the source.
Asked how the outcome might be different following this intervention, the
source said: "It could worsen the outcome for France or it could improve it
depending on how the haggling goes. This is the usual kind of behind the scenes
business in these decisions."
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ed/vm/jsa