A drop in France Telecom’s Profits

Restructuring and falling prices in top markets, claim France Telecom, are responsible for a sharp drop in their profits for 2006.

Trading mainly under the Orange brand, the operators report a net profit of 4.14billion euros for the 12 months up to December 31st; that is a 27% drop of 1.56billion euros from 2005.

Restructuring costs of 567m€ and an impairment charge of 2.8billion€ are the main cause in drop; which, they state, is due to a fall in the value of the struggling
UK mobile business. France Telecom saw its full-year operations profit fall to 6.9billion€ from almost 10.5billion€ in 2005; a drop of approximately 33%.

They are also fuelling speculation that by keeping a stable dividend they are saving up for new acquisitions. France Telecom, which also operates in Britain, The Netherlands, North Africa and the Middle East, say they are looking for emerging markets, including those in Asia.