France Telecom targets European expansion

NEWS France Telecom is to invest FF15bn per year into its external markets. Chief executive, Michel Bon, said the company expects 15 per cent of revenues to come from non-French markets by 2001. At present, 8 per cent of the company's revenues are from external markets, a 4 per cent increase since 1985. Most of the money for the investment programme will come from a $10.7bn public share offering. The French government is to sell 99 million shares, with 20.5 million going to France Telecom's partner, Deutsche Telekom, as part of a share swap. Established branches in Belgium, Italy, the Netherlands, Spain and the UK will receive a majority of the funds, while plans to build fibre-optic networks in Europe will begin next year. The company hopes investment into the European market will help reduce its FF10bn debt and counterbalance competition from other French telcos. Bon said he foresees the annual loss in France Telecom's share of the local market - which was opened up to competition in January - to reach 4 to 5 per cent.