FT Continues With Plans To Purchase Korek

France Telecom (FT) is proceeding with the purchase of a stake in Iraqi cellco Korek Telecom, after it was chosen as a preferred bidder over South Africa’s MTN, according to a report by Middle East business intelligence service MEED.

The GSM operator, based in the autonomous Iraqi Kurdistan region, won a nationwide licence in 2007 and has proceeded to branch out from its northern homeland to cover central and southern regions of Iraq. Korek is Iraq’s third largest cellco by subscribers.

The MEED report adds that Korek, with a customer base approaching three million in a market with room for growth, is an attractive asset for the French group, which recently expanded in the Middle East and North African (MENA) region by purchasing a 40% stake in Morocco’s Meditel.

FT is looking to increase its territorial presence further via more acquisitions, with the overall aims of doubling its revenues and reaching 300 million subscribers worldwide. The deal, which is yet to be finalised, would also assist Korek’s further expansion plans with the investment of a global player, whilst also representing a cheaper option for FT than bidding for a new licence in Iraq and building a network from scratch.

Meanwhile, FT has recently established research and development labs in Amman and Cairo to create services and products specific to the Middle East market.


Providing a cautionary note, UAE-based Etisalat previously failed to negotiate a stake purchase in Korek, saying that the Iraqi firm demanded ‘too much for too little’ in talks with the Abu Dhabi operator more than two years ago.

Bharti and Vodafone Struggle to Make Money In Africa

For Vodafone Group Plc, Bharti Airtel Ltd. and other phone companies with about $90 billion invested in Africa, making more money from each user in the world’s fastest-growing market is becoming the biggest challenge.

The number of operators is prompting a race to the bottom on call rates. In Tanzania, which has seven phone companies, prices have fallen 90 percent over the past 18 months. Companies also face among the world’s highest “churn” rates, with users frequently changing operators, and patchy infrastructure, all of which make returns on investment difficult.

“It is hard,” said Pieter Uys, chief executive officer of Vodacom Group Ltd., which is controlled by Vodafone and is the largest provider of mobile-phone services in South Africa and Tanzania. “You have to do business in a very different way, you have to build data networks, find other ways to grow revenue.”

Phone operators gathered at Africa’s telecommunications conference that began yesterday in Cape Town want to sell services to the 50 percent of the market that doesn’t have mobile phones. They also want to service current customers more cheaply, without losing user loyalty, while stemming declines in average revenue per user, or ARPU, by offering newer services such as mobile Internet, banking and other money transactions.

“We are now dealing with an ecosystem that’s changing very, very fast,” Andile Ngacaba, chairman of Dimension Data and Convergence Partners, said at the conference. “On the one side, we see this subscriber growth and growth in data and data applications. On the other side, we see this decrease in ARPUs. This requires new models of investment such as infrastructure sharing.”

African Growth

Operators have been lured to the continent by its promise. Africa has a mobile-phone population of about 445 million handsets, according to a McKinsey & Co. report. It took 20 years for the size of the mobile-phone population to reach 200 million, and less than three years to get to the next 200 million, according to the report.

Africa has “become the fastest-growing region in the global cellular market, going from fewer than 2 million mobile phones in 1998 to more than 400 million today,” it said.

The mobile value-added services market in Africa was worth $4.5 billion in 2009, and over the next five years is forecast to grow at a compound annual growth rate of 20 percent, generating $11.5 billion by 2014, Informa Telecoms & Media, a London-based consultant, said in its Rural Connectivity Report in Africa published this month.

Capture Opportunity

About 80 percent of the sales were from messaging, while mobile Internet contributed 14 percent and mobile entertainment such as music and television 3.5 percent, the report showed.

Internet and broadband penetration is still in single digits, Uys said.

“So the possibilities are still there but it’s what you pay for it to get it, the investment in infrastructure,” he said. “If the tariffs are driven too low for whatever reason then it might also not make sense.”

In order for mobile operators to “capture this opportunity,” the market needs consolidation, McKinsey said. “The industry structure should be rationalized, for example, because many markets, even smaller ones, have four or more players.”

Competition on the continent is fiercer now than it has ever been. In the Democratic Republic of Congo and Tanzania, mobile-phone tariffs plunged between 50 percent and 60 percent in the six months through September.

Tumbling Prices

Prices in Kenya have been slashed to such an extent that Safaricom Ltd. Chief Executive Officer Bob Collymore said India’s Bharti, which bought most of Zain’s African operations last year for $9 billion, is losing money on as much as 50 percent of its voice traffic.

Safaricom has an 86 percent share of the market and is 40 percent held by Newbury, England-based Vodafone. Bharti’s head of African operations, Manoj Kohli, declined to comment on Safaricom’s remarks. “We can’t comment on our competitors’ claims,” Kohli said.

On Aug. 18, Bharti halved tariffs in Kenya to 3 shillings, Les Baillie, a spokesman for Safaricom said. Safaricom “knew that voice was always going to become a commodity,” Baillie said. “It was not expected that it would happen so rapidly though.”

Companies are scrambling to adapt their operations to the new climate.

“We have to review our business model and make it leaner and compete on price and have more quality in our network and to have more data,” said Mickael Ghossein, chief executive officer of Orange Telkom Kenya, which is 51 percent held by France Telecom SA. “We have to enhance our quality of networks.”

Sharing Towers

In South Africa, Vodacom, which is 65 percent owned by Vodafone, is investing in data networks. Data now accounts for more than 50 percent of its traffic and is growing at more than 50 percent a year, Uys said.

The company is also pushing smart devices that are able to browse the Internet to low-end segments with touchscreen phones that retail at 499 rand ($73). Once users have an improved mobile-browsing experience, data consumption increases, Uys said

Operators are also sharing infrastructure, especially to reach sparsely populated rural areas where returns on capital invested in infrastructure are low.

Infrastructure sharing and outsourcing of towers has been punted for years. Now, faced with greater competitive pressure, companies are beginning to act.

‘Good Industry’

Last month, Vodafone signed an agreement with Eaton Towers to manage its 750 towers in Ghana. On Nov. 5, American Tower Corp. agreed to buy 3,200 towers from Cell C Ltd., South Africa’s third-largest mobile phone services provider, in a deal worth $430 million.

“We are going to see more and more of those type of deals happening,” said David Lerche, a telecoms analyst at Johannesburg-based Avior Research. “There are lots of little tower companies running around trying to position themselves as tower outsourcers. It’s quite an interesting development.”

For all its challenges, the market is still attractive, Marc Rennard, vice president of Orange Mobile for Africa, Middle East and Asia, said in an interview.

While investor interest has waned a little, “we are profitable, the big players, the five, six main players are profitable,” he said. “It’s still a good industry.”

-Bloomberg

MTN Announces Increase in Subscriber Base

South Africa-based telcoms group MTN has announced that its consolidated subscriber base increased to 134.47 million as at 30 September 2010, up 4% from the 129.21 million reported at the end of June. A company statement credited the increase to ‘high quality networks, attractive value propositions and efficient distribution’.

The South and East African region, which contributes 22% of the group’s customers, increased its subscriber base by 4.9% to 30.08 million for the quarter - mainly driven by growth in its domestic market. In South Africa, the customer base rose 3.9% to 17.77 million, helped by the addition of 616,000 pre-paid users and its MTN Zone offer, which allows MTN subscribers access to a discounted call rate if they are in an area experiencing a low volume of MTN traffic. ARPU in South Africa remained stable at ZAR152 (USD21.6).

The West and Central African region, which contributes 46% of the group’s subscribers increased its customer base by 3.4% in the three month period to 61.38 million. Nigeria – MTN’s largest single market and that which contributes 60% of the region’s subscriber base - grew its base 5.1% to 36.84 million. MTN credits the increase to ‘superior network quality and a successful distribution framework’. Elsewhere in the region, Ghana’s customer base declined from 8.72 million to 8.46 million due to the introduction of mandatory SIM registration on 1 July 2010.

The Middle East and North African region, which accounts for the remaining 32% of MTN’s consolidated subscriber base, increased its numbers by 4.1% to 43.01 million. MTN says that the growth within the region was mainly due to its Iranian operation, which contributes 66% of the region’s subscribers. MTN Irancell increased its users by 5.6% to 28.49 million. Elsewhere in the region, Syria benefited from improved brand awareness, increasing its subscriber base to 4.72 million, a rise of 6.8%.

MTN, Bharti, Zain Lead In Revenue Growth Worldwide

As part of its latest round of service provider benchmarking analysis, TeleGeography has found that 16 leading service providers have grown their revenues by an average of 45% over the last three years, equating to some 13% per annum. As could be expected, those achieving the highest growth have been focused on wireless markets in Africa, Latin America, the Middle East, India and China. Leading the growth charge are MTN, Bharti and Zain which have all more than doubled their revenues in the last three years. Despite being substantially larger companies than the top ranked three, America Movil, China Mobile and Vodafone have all recorded growth in the 45%-70% range. Of the companies covered in this research the only other to achieve similar growth is AT&T, which has achieved this via acquisition and reconsolidation of US service providers, rather than organic growth.

While it is no surprise that four of the bottom ranked five companies are incumbent operators from four of Western Europe’s largest markets, the level of their growth (or more accurately the lack of it) will surprise many: in a nutshell all five have stood still for three years. BT and NTT are locked into their highly competitive and low-growth home markets, and are also primarily dependent on wireline markets. Telefonica, Deutsche Telekom and France Telecom have all taken great strides in the past to build businesses beyond their home countries; collectively they now generate over 55% of their revenues from beyond their home markets. However, over the last three years the trio have been held back by tough competition and diminishing growth in the Western European region, and, in the case of Deutsche Telekom, difficulties growing its US operation. The results of their efforts in Latin America and Eastern Europe have not been sufficiently robust to generate substantial revenue growth for the consolidated groups.

So why does this matter? ‘Absolute scale remains an important metric, but growth often has a more direct impact on profitability and the strength of a business’ said TeleGeography’s John Dinsdale. ’The next five years will see the growth rate of telecoms markets drop to less than half of what has been experienced over the last five years. Those companies which are better equipped to meet and beat market growth rates will be more richly rewarded’ added Dinsdale.

TeleGeography’s service provider benchmarking research includes analysis of revenues, profitability, subscribers, ARPU, growth rates, geographic footprint, market share, competitive positioning and future growth prospects. It is published as part of TeleGeography’s GlobalComms Insight service which is a companion to the GlobalComms Database, a regularly updated online database of wireline, wireless and broadband competition. No other telecoms market research service rivals their collective geographic scope and depth of coverage.

http://www.telegeography.com/cu/article.php?article_id=32307&email=html

MTN Silent On Dubai Relocation Claims

No comment has been made by South Africa’s MTN on the rumors regarding the moving of its headquarters from the country to the Middle East. The refusal came after it was reported that the company plans to move its group operations out of the country and eventually delist its shares from the Johannesburg Securities Exchange.

According to MTN executive director Nozipho January-Bardill in late January, the planned relocation of the technical services support team to Dubai is part of the group’s ongoing response to the challenges of the changing global telecommunications industry and it is also intended to address the logistical challenge of supporting the group’s networks in the Middle East in particular, and certain parts of Africa.

Using Dubai as a regional hub offers significant benefits to the company for tax and transport options even though MTN doesn’t have any operations in the UAE.

MTN "Could Be Planning Move to Dubai"

No confirmation or denial has been given by mobile operator MTN regarding its plans to abandon SA in favor of Dubai, a location closer to its higher revenue earners.


It has been speculated that company plans to move its group operations out of the country and eventually delist from the Johannesburg Securities Exchange. It may leave the local business as a subsidiary of the company, or even up for sale.

MTN is already registered in the Middle Eastern country which is said to be the head office for its Middle East and North African operations.

Several MTN groups operation unit has been quietly moving its operations without making any local splash about the plans.

Etisalat Hits 100 Million Mark

UAE-based telecoms operator Emirates Telecommunications Corporation (Etisalat) has revealed that its subscriber base has exceeded 100 million customers across 18 markets in the Middle East, Asia and Africa, covering two billion people. The announcement follows Etisalat’s acquisition of the remaining 18% of its West African venture Atlantique Telecom (AT) it did not already own for USD75 million earlier this month.

Etisalat operates AT as part of a ten-year management contract ending in 2015; the company holds majority stakes in seven operators in Cote d’Ivoire, Benin, Burkina Faso, Gabon, Niger, Togo, and Central Africa Republic. At the same time, the UAE incumbent revealed it had filed an application with the Indian Foreign Investment Promotion Board (FIPB) in December 2009 to obtain approval to raise its 45% stake in its Indian subsidiary Etisalat DB to 50% plus one share. The company has said it is targeting majority stakes in its subsidiaries and associates for greater operational and financial synergy.

MTN Attributes Fall In SA Growth To Sim Registration

­South Africa's MTN Group has announced that it had a shade under 108.5 million subscribers at the end of September. This is a 5% increase for the quarter from 103.2 million subscribers recorded at the end of  June 2009 and a 19.6% increase for the year to date.

The South and East Africa (SEA) region increased its subscriber base by a very modest 0.5% for the quarter. This was primarily due to the disappointing negative movement of the South Africa subscriber base which contributes 64% to the region. South Africa's subscriber base declined from 17.23 million at the end of June 2009 to 16.42 million at the end of September. The main reason for the movement is the significantly lower number of gross connections following the implementation of RICA in August, which requires PrePay SIM cards to be registered with the operators. Given the current market uncertainty following the RICA implementation there are challenges with South Africa achieving its revised target of zero net additions for the full year.

Uganda increased its subscriber base by 11% in the quarter following the continued success of MTN Zone which now constitutes 95% of the total prepaid base.

The West and Central Africa (WECA) region increased its subscriber base by 5% for the quarter driven mainly by Nigeria which accounts for 58% of the region's subscribers. Nigeria recorded a 5% increase in its subscriber base to 28.76 million mainly due to continued network rollout, innovative product offerings and the effectiveness of the distribution channels implemented earlier in 2009. Ghana maintained its market share and increased its subscriber base by 2,6% despite aggressive competitor activity. Both Cameroon and Cote d'Ivoire increased their subscriber bases by 4% and 5% to 4.19 million and 4.21 million, respectively.

The Middle East and North Africa (MENA) region recorded a 9% increase in subscribers for the quarter. This was largely due to continued growth from the Iran operation, which contributes 62% to the region's subscribers and increased its base by 8% to 20.7 million. Iran's growth was attributable mainly to expanded network coverage and continued promotional activity. Syria increased its subscriber base by 13% to 4 million, well above expectations. Afghanistan, although a relatively smaller operation, has been steadily contributing positively to the region's growth and has gained No. 1 position in the market from No 3 at the beginning of 2009.

MTN has revised its subscriber net addition guidance for the year for South Africa to zero and for Syria to 550,000 while other individually disclosed country guidance remains the same. MTN expects to achieve the total group subscriber net addition guidance for 2009 of 22.6 million.

MTN Deal Off As Bharti Blames SA Government

­India's Bharti Airtel and South Africa's MTN have called off their merger talks after they were unable to secure the necessary permissions from the South African government.

In a statement to the Bombay Stock Exchange, Bharti said that "the alliance planned between Bharti and MTN was a vision based on solid fundamentals, which had the potential of creating an emerging markets telecom giant and the third largest telecom company in the world. Substantial synergies could have been captured with this proposed transaction."

"The broad structure being discussed by the two sides had taken into account the sensibilities and sensitivities of both companies and both their countries."

Bharti said that the proposed deal took into account their position in their local markets - including listing, tax residences, management and brands. The transaction would have been the single largest Foreign Direct Investment into South Africa and one of the largest outbound FDIs from India.

In its statement, Bharti said that the proposed structure needed an approval from the South African government, which has been refused. Bharti added though that it hopes the government will review its decision and is open to concluding the deal as it currently stands.

Bharti concluded by saying that it will continue to seek overseas investment opportunities.

This is the second attempt by the two companies to try and forge an alliance and the current round of talks had been extended on several occasions. A merger would have created a telecoms giant with more than 200 million customers across India, Africa and the Middle East.

Zain Denies It's In Talks With Asian Group

* Zain says unaware of stake sale talks after report

* Shares close 1.6 percent higher

Kuwaiti telecoms firm Zain said on Sunday it was not aware of talks between shareholders and an Asian group after a newspaper reported stake sale negotiations.

The firm said in July that it was still reviewing a possible sale of its African operations -- excluding Morocco and Sudan -- after French media and telecoms conglomerate Vivendi broke off talks on buying the operations.

Kuwait's Al-Rai newspaper, citing unidentified sources, said on Sunday that Zain's largest shareholders were in talks with a major Asian telecoms group to sell more than 40 percent of the firm.

"Zain would like to clarify that regarding what has been published in a local newspaper about negotiations between a major Asian group and shareholders, the executive management of the company is not aware of this subject, which is up to shareholders," Zain said in a statement on the bourse website.

Sovereign wealth fund Kuwait Investment Authority owns 24.61 percent of Zain. Kuwaiti family-owned conglomerate Kharafi Group is Zain's second largest shareholder, with 13.3 percent.

Neither KIA nor Kharafi were immediately available for comment. A Zain spokesman declined to comment further.

Zain ended 1.6 percent higher on the bourse on Sunday.

"There is an enormous amount of rumours about Zain," said Naser al-Nafisi, general manager at Al Joman Center for Economic consultancy in Kuwait. "If there's anything going on between the shareholders, the management should know about it."

The newspaper, which did not identify the Asian group, cited unidentified sources as saying that the biggest shareholders in Zain had "the ability and the suitable mechanism to provide the required majority stake".

Sale talk has swirled around Zain in recent weeks.

The head of the international unit of Emirates Telecommunications Corp (Etisalat) said in July that the UAE firm was interested in buying a 51-percent stake in Zain, "given the right values".

Zain said on July 1 that it was working with Swiss investment bank UBS and other consultants to review its strategy as a result of the global financial downturn.

- Reuters

MTN, Bharti Again Extend Deadline For Talks

In separate statements, India's Bharti Airtel and South Africa's MTN have confirmed that they are extending the deadline for their merger talks. The two companies had entered into an exclusivity agreement regarding the potential transaction until July 31, 2009. As discussions between the parties regarding the potential transaction are continuing, both parties have agreed to extend the exclusivity period up to August 31, 2009.

The statements noted that no decisions or agreement to acquire any shares or implement the transactions outlined above have been made by the Boards of either Bharti or MTN and the discussions may or may not lead to any transaction. The structure and terms of the potential transaction may be adjusted to reflect further discussions between the parties.

The merger talks could lead to a potential US$23 billion deal to create a new phone giant extending across Africa, the Middle East and into southeast Asia. Previous merger talks between the two companies broke down a little over a year ago.

Zain, Etisalat Deny Acquisition Claim

Emirates Telecommunication Corp., or Etisalat, is not in talks to buy a 51% stake in Kuwait's Mobile Telecommunication Corp., or Zain, a senior company official said Tuesday. "We are not in negotiations with Zain," Ahmed bin Ali, Etisalat's manager of corporate communications, told Zawya Dow Jones.

Media reports cited an Etisalat official as saying that the company is interested in buying a 51% stake in Zain. Bin Ali said the official's comment was a "general opinion of an employee." Zain spokesperson declined to comment.

Zain and Etisalat are the two largest telecom operators in the region by market capitalization after Saudi Telecom. Etisalat's market capitalization is $20.64 billion, while Zain's is $17.83 billion. The two operators compete in many of the same markets. Both have operations in Saudi Arabia, Sudan and Nigeria among other countries.

In comments to Zawya Dow Jones in April, Etisalat's chairman said the company was looking to expand across the Mideast, Asia and Africa.

In May, a Zain executive told Zawya Dow Jones that the company's focus for the year is no longer on mergers and acquisitions. Instead the aim is to synergize Zain's existing operations.

Zain Reports 5.5% Raise in Q2 Profits

Kuwaiti mobile operator Zain, the third-largest Arab telecoms firm by market value, posted a 5.5 percent rise in second-quarter net profit as the number of subscribers rose. Net profit in the first half was 154.5 million dinars ($538.3 million), Zain said in a statement on Tuesday, without giving a quarterly figure.

Reuters calculated a second-quarter net profit of 78.8 million dinars based on previous financial data, which showed the firm made 75.7 million dinars in the first quarter. The number of customers rose 37 percent to 69.5 million in the first half, the statement said.

Zain said revenues in the six months to June 30 rose 24.1 percent to 1.16 billion dinars compared with the same period last year, and EBITDA advanced 46.3 percent to 512.2 million dinars. It gave no quarterly data.

First-half results include a gain of 26.6 million dinars from an initial public offering in Zambia and losses from currency fluctuations of 31.3 million dinars, Chief Executive Saad al-Barrak said in the statement.

"With improving currency stability in many of our African operations we expect even better in the second half," he added.

Zain announced at the start of the year a goal of 30 percent net profit growth but a spokesman reiterated on Tuesday this target looked "a little bit ambitious".

Emirates Telecommunications Corp (Etisalat) is interested in buying a 51 percent stake in Kuwait's Zain Group at the right price, the chief executive of its international unit said on Tuesday.

Zain, which is partly owned by the country's sovereign wealth fund, said on Monday it still hoped to sell its African unit despite French media and telecoms giant Vivendi calling off talks to buy a majority stake in the business.

Zain has spent billions to expand in the Middle East and Africa and operates in 23 countries to offset rising competition at home in Kuwait where VIVA, an affiliate of Saudi Telecom (), started operating as third mobile firm last year.

- Reuters

Nigerians Get Top Posts in Zain Group

The profile of Nigerians within Zain Group has risen sharply with the appointment of several people of Nigerian descent to key positions across Africa and the Middle East in line with the company’s newly implemented transformation programmme entitled ‘Drive2011’.
The giant mobile operator which has a commercial footprint in 23 countries across the Middle East and Africa now has 22 Nigerians within the top management strata of the organisation in various countries.

According to the CEO of Zain Nigeria, “the appointment of Nigerians to very important positions within Zain Group clearly demonstrates that this company offers every high performing employee irrespective of their nationality the opportunity to move up the corporate ladder and work in any country where their skill and experience are required”.
‘Drive2011’ will propel the company to achieve its target of becoming a top-ten global mobile operator by 2011 through a combination of focusing on customer facing services and commercial activities that will result in managed outsourcing, centralization, leveraging capabilities, as well as training and development for personnel, all of which will improve operating efficiencies.
“At Zain Nigeria, we are glad to be a major contributor to the development of the country’s human capital through world-class training and expatriation which provides excellent opportunity for brilliant Nigerians to acquire international work experience”, said Ligali.
“The progress of Nigerians undoubtedly will contribute to Zain’s progress and underscores Zain brand’s value of Belonging. At Zain we harness and celebrate the inherent diversity within this large family. Indeed, one of the benefits of belonging to a global family like Zain is the opportunity for people from various parts of world to work in a harmoniously positive and culturally diverse work climate”, he said.
The latest on the list of recent high-profile appointments are Mrs. Grace Omo-Lamai, who was named Human Resources Director for the Democratic Republic of Congo, Abosede Olabimtan, Daniel Udochi and Folasade Abieyuwa Akinlade have been appointed to key positions within the Zain group in Bahrain, Gabon and Kenya, respectively.
This development comes after 300 employees were offered ‘exit packages’ as part of Zain’s restructuring program.

Zain Launches Borderless Roaming for Data Services

Mobile operator Zain has launched cross-border data services across the Middle East and East Africa on its One Network platform. The GRX-based data access is provided to Zain customers roaming in other markets where the company is active and provides for data use at the local country rate. The One Network already offers local pricing for voice and SMS, with no charges for incoming calls while roaming on another Zain network.

Customers can also top-up using local country vouchers. The new data services include internet, e-mail, MMS, BlackBerry service and Zain portals, such as the recently launched Zain Create platform.

The Middle East countries that benefit from this data service are Bahrain, Jordan, Iraq, Kuwait, Saudi Arabia and Sudan, while in East Africa the countries are Kenya, Tanzania and Uganda.

By the end of 2009 all other African One Network countries will join and benefit from this data service. Customers do not have to pre-register for the data access service, move to a special tariff, change their handset settings or pay any subscription fees for One Network. 

France Telecom Q1 Profits Fall Due to TV Services

France Telecom has reported a 4.4% drop in first-quarter profits due to costs incurred by its French television services. EBITDA was down 4.4% on a comparable basis, at EUR 4.3 billion. The EBITDA margin dropped 1.7 points from the first quarter of 2008.

Revenues grow 0.4% on a comparable basis, but currency fluctuations resulted in recorded sales dropping to EUR 12.7 billion from EUR 13 billion a year ago. The firm cited a strong performance in France with revenues up 2.1%, in Africa and Middle East (+5%) and in Enterprise services (+0.4%). United Kingdom trend was unchanged from fourth quarter of 2008 (-0.6%); as anticipated, revenues dropped in Spain ( 4.1%) and in Poland (-4.7%).

The company reported worldwide that it had 122.9 million customers at 31 March 2009 (excluding MVNOs), a 9.5% increase year-on-year. The number of contract customers continued to grow rapidly, up 9.0% in one year. The number of 3G broadband customers was up nearly 80% in one year, with 20.6 million customers at 31 March 2009.

The MVNO customer base in Europe rose to 3.6 million at 31 March 2009 (of which 1.9 million in France), compared with 2.2 million a year earlier (of which 1.5 million in France).

Commenting on the results for the first quarter of 2009, Didier Lombard, France Telecom Chairman and Chief Executive Officer, stated: "In an economic environment that continues to weaken, especially outside of France, the Group has been able expand its customer base in the first quarter of the year to more than 183 million customers, with the number of mobile customers increasing more than 9% to almost 123 million and broadband services rising nearly 9% to 13 million ADSL-equipped households."

He added, "The Group is able to confirm its guidance of 8 billion euros in organic cash flow for 2009, despite the pressures on consumer and business behaviour resulting from the overall economic conditions."

France Telecom Q1 2009 results