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Orange 3G Plans To Be Squeezed

November 29, 2002 - source: BWCS

Debt-laden national operator France Telecom may be forced to announce a slow-down in its 3G plans next week, as it struggles to cut costs. According to reports in the Wall St Journal, the embattled operator is looking to slash costs by around €9 billion. This figure is expected to be matched by a loan from its major shareholder, the French government.

France Telecom's mobile subsidiary Orange would allegedly be able to contribute €2 billion in cost savings by reining in its next generation mobile phone service plans across Europe. This contingency may prove part of the plans of new boss, Thierry Breton, when he announces a restructuring plan on 5th December. Investors hope that his scheme will show how the company plans to begin attacking its mountainous debt of nearly €70 billion. The recent sale of France Telecom's stake in Greek mobile operator Panafon for €310 million was a step in the right direction, but will have barely registered on the French company's balance sheet.

Newspapers in France appear convinced that the government, which still owns 55.5% of the operator, will chip in with a loan of €9 billion. However, government-ownership is a two-edged sword as the "government employee" status of many workers at the company make it much harder for the top brass to push through schemes to reduce the head-count. Some analysts believe that France Telecom is looking to lose 20,000 employees over the next three years.

 


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