Orange strategy in

content and web

services
vision + focus on TV

Morgan Stanley investor conference

London, June 24th 2010

Raoul Roverato – New Growth Businesses

France Telecom
cautionary statement

this presentation contains forward-looking statements about France Telecom’s business,

in particular for 2010 and 2011. Although France Telecom believes these statements are
based on reasonable assumptions, these forward-looking statements are subject to
numerous risks and uncertainties, including matters not yet known to us or not currently
considered material by us, and there can be no assurance that anticipated events will
occur or that the objectives set out will actually be achieved. Important factors that could
cause actual results to differ materially from the results anticipated in the forward-looking
statements include, among others, overall trends in the economy in general and in France
Telecom’s markets, the effectiveness of the integrated operator strategy including the
success and market acceptance of the Orange brand and other strategic, operating and
financial initiatives, France Telecom’s ability to adapt to the ongoing transformation of the
telecommunications industry, regulatory developments and constraints, as well as the
outcome of legal proceedings and the risks and uncertainties related to international
operations and exchange rate fluctuations.

more detailed information on the potential risks that could affect France Telecom's financial
results can be found in the Registration Document filed with the French Autorité des
Marchés Financiers and in the Form 20-F filed with the U.S. Securities and Exchange
Commission. Except to the extent required by law, France Telecom does not undertake
any obligation to update forward-looking statements.

1
the digital revolution is driving the proliferation of new contents and services
on increasingly connected screens…

a multiplication of screens that are nomadic, connected, multi-function, and that are
used for entertainment, communication and practical life

an offering of
products and
services that is:

complex

unaggregated

often dedicated to
a single
device/terminal

2
…leading to increasingly interwined TV and web services
Internet services are coming to the TV set TV shows are reaching the Internet and mobile universe

VOD VOD market in France

82.4m€
84m monthly requests
+64%
91% of VOD for TV programmes
50.2m€
consumption
premium TV content:

1mdaily users
is through –, , ,
IPTV requested TV content series: 24, Prison

68minutes of streamed Break…
video/user/week – films from 20th
Source: GFK-NPA 2010
Century Fox and
Source: BBC iPlayer Monthly
Universal Pictures
Sky TV Performance Pack March 10

direct
access to sporting bet events
3rdmost popular
market video-sharing site in the
through Skysport with one click

2.1m users/month watch US in May 2009:

in
2009, SkyBet generated TV or video on mobile – 400 millions
revenues of £48M (France) streams/m, 35 million

forBig Brother 5, 2.6 million votes
942k watch mobile VOD unique users
out of a total 14 million were made or TV programming
$120m est. advertising
source: company website via Sky remote controls (France) revenues in 2009
Source: Comscore 2010
global installed base of connected figures are 3 month
Connected TV average ending Dec 2009 Source: Comscore, Orange Analysis
devices (M units)

+ 96% +53% CAGR

in the long run, on any connected screens, TV will be a
service among others
613
412,6 sharing &
2009 entertainment communication eractical services

Google TV in partnership 53,2
21 2014
with Sony, Logitech and
Intel Connected TVs Tablets, Netbooks,
Mobile Internet devices,
e-books

launchof Intel/Yahoo!
3
web TV widget platform source: Strategy Analytics 2010, Ovum 2010
all major players have adjusted their positioning in order to best answer the
market’s demand for multi-screen content and services
communication
new players from the Internet world are encroaching on communica tion services and are directly addressing customers
 telcos are increasingly disintermediated

content services aggregation devices/

Players access
production practical life entertainment communication screens

: 176 million

Windows Phone 7

: 320 million

Phone directory
http://indy posted.com/wp-content/uploads/2009/09/dtlogo.gif

VoD
Practical life channels 810k TV subs 15M BB customers
Exclusivity

Exclusivity
8.3M BB subs
3M TV subs

Sky Broadband & Talk services

4 2M BB subs
9.7M TV subs
 surprisingly, this abundance of connected screens will not significantly contribute to
developing the access market and is leading telcos to rethink their strategic
positioning
the market for content and services is continuing to France Telecom / Orange has achieved significant
expand as a proportion of total market positions in fixed & mobile broadband data (4)

telco & media addressable consumer market

France concentrate on
2009-2013 TCAM
7.9m 3G mobile customers
operationnal

15.4% non-SMS data in excellence on
3,6% personal services revenues core activities …
Poland
8.9m fixed broadband
€130bn
130bn €149bn


subscribers
6.6m 3G mobile customers and risk becoming
100% disintermediated
9.8% non-SMS data in
services (1) 10% 13%


personal services revenues as a simple
2.3m fixed broadband
(2)


subscribers
provider of
content 24%
28% bandwidth

UK OR

5.9m 3G mobile customers
access &
10.1% non-SMS data in
65% personal services revenues combine
comm. (3) 59%

0.8m fixed broadband operational
subscribers
excellence and
diversification on
Spain new services (with
2009 2013e
5.5m 3G mobile customers
business models
(1) Content includes TV advertising, Pay TV/Video, Gaming/Gambling, Music,

8.9% non-SMS data in from the Internet
Photo and digital books
(2) Services include search and portals (paid and advertising) IT assistance and personal services revenues world)
services, health, device insurance, contactless, payment, home automation and
1.1m fixed broadband
location based services customers
(3) Access & Communication only includes outgoing revenues
(4) end of Q1 2010 figures
Source: Orange

5
 our vision: make Orange best loved operator by offering the best of digital life

CUSTOMER GUIDANCE EMOTION

Quality

Simplicity Exclusive
communication
Seamless
IM
mail Instantaneous
social VoIP
Multi-screen
networks

photos Interactive
Harmonisation games
smart grid
radio

Interoperability practical life VOD entertainment Community

music

Recommandation local
TV
services Customization
online gambling
storage
Geolocation
Preferences

On demand
Sharing

6
give value to core telecom activities
while creating and developing new sources of growth
make Orange best loved operator by offering the best of digital life will allow us to
take a bigger share of these growing markets while protecting us from
disintermediation by over the top* communication services
benefits for customers / differentiating from other telcos, traditional medias and over the top players

bring the best content and live a richer, more interactive,

services on your screens immersive and personnalized
experience

control your spend thanks to make the most of the digital

bundled offers and easy world in the shops, and online
additional purchases on your on your screens
Orange bill
decide which personnal data
Orange uses and for which
purpose

7
*Over the top players deliver their services through the
Internet but without a specific agreement with the ISP
in order to offer our customers the best of digital life, we will make Orange the
preferred partner of the best players in the web, techno and media industries
benefits for partners
Web players OS and device manufactueres traditional media

improve visibility of your contents and

services promoted by Orange:
privileged access to Orange

device homescreens
customer base:

Orange web portals 13,5m BB subs
29,2m 3G subs

Orange app shop
3,4m IPTV subs
64m fixed UVs/month

Orange widgets 14m mobile UVs/month
extract more from your contents and
services thanks to Orange technology:
technology:

platforms for content/service
enrichment, interactivity…
interactivity…

Orange customer relationship enablers
for enhanced customer targeting
(usages, profile…
profile…)

use the marketing and sales’

sales’ power of Orange:

be present in our retail network (>600 stores in France)

include your service in our mobile or fixed offers

bill your services on the Orange bill

be included in our marketing campaigns

8
as part of its corporate social responsibility policy,
Orange wants its partner to foster in a sustainable ecosystem
so Orange develops jointly with our partners a universe of content and services that
are integrated in our telco offerings and deployed on all connected screens

communication entertainment practical services

partage de mes informations

customer relationship enablers

personal data management / telco
ID management Address book data

Dolphin, Monkey : content and services included for free for our Origami: content and services that are included
prepaid customers who spend the most in the telo offering

9
beyond content and services, Orange guides its customers and partners along the
digital revolution

since 2003 tomorrow

potential new services

contents web services health travels dedicated to daily life

culture

finance
energy

transport

develop new sources of growth on adjacent sectors

transformed by the digital revolution
by addressing complex ecosystems with dedicated verticals and partnerships

education
develop with countries new sources of growth
and enhance the Telecom core business activity
10
Orange has been a pioneer in the convergence of TV and Internet services since 2003
Orange focuses on distributing TV channels and developing interactive
interactive services

content services aggregation devices/

access
production TV publishing TV distribution Web services screens

thematic package

<1‰ of
713k
in general,
Orange has
13.5m BB
Orange buys

Group subscribers Orange developed subscribers and
revenues distributes interactive (Europe) customizes
partners’ TV video services devices
bouquets & (search,
channels recommendati

3.4M TV on, social
subscribers features…)
all figures as of end of Q1 2010

Orange has an integrated TV/access economic model

increase ARPU
our integrated business model is profitable as

a whole

triple play
mobile multimedia

considering the strict TV content aggregation
business model, which is not ours, it has
historically taken industry players 4 to 10 years
get/keep advertising to reach breakeven

11
 … and is now a leading international IPTV player with 3.4m subscribers worldwide

IPTV mobile TV/video

3.4m subscribers 3m active users*
of which 900k hybrid IPTV/DTH 140m streams*
1.6m pay TV subscriptions
8.1m paid / 25M viewed VOD*
Senegal
UK
Poland 57k* Internet customers
816k fixed BB customers
5.1m* UV on FT web properties 2.3M fixed BB customers Jordan
417k IPTV/DTH customers
12.2m* UV on FT web properties 135k* Internet customers

Slovakia

41k connected FTTH

France Ivory Coast

135k* Internet customers

8.9m fixed BB customers
2.9m IPTV/DTH customers
23.7m* UV on FT web properties

Spain

1.1m fixed BB customers

customer base:
79k IPTV customers
183.3m total
9.3m* UV on FT web properties
13.5m fixed BB
Orange
3.4m IPTV
group
123.7m mobile (29.2m on 3G)
worldwide Web
Orange countries
62.2m* UV on our web properties UV : unique visitors

12 Orange countries with IPTV
14m* UV on our mobile portals all figures for Q1 2010

~160m* UV on our ad network (except when tagged with *: end 2009)
in France in particular, Orange has launched several cutting edge TV services and
which are setting the future market standards…
Orange sport / Orange ciné
cinéma séries connected TV
key results :
live stats  as of March 31 2010, Orange is now
present in new distribution networks
(i.e. TV aisles of retail stores)
 showroom services driving telco
live on demand subscriptions and stimulating usage
videos Direct access to Orange portal from LG of Orange TV services
TV remote control

mobile TV

French IPTV Customer Base French PayTV Customer Base (k key results :
(k subscribers) subscribers)
 more than 3M subscribers to our
Origami star package (40% choose
CAGR:
TV)
57%
 >1M downloads of our mobile TV
application on the iPhone

videoparty
key results :
key results :
 Orange present on PCs beyond its
 authorities have questioned Vivendi’s exclusive rights to networks, with showroom services
distribute their TV channels, which could potentially lead to  will provide Orange TV customers with
more more value for Orange enhanced web video services (search,
 interactive services of Orange sport and Orange cinéma recommendation, sharing, remote
séries are now a standard of the market, fostering interactive programming…)
TV usages  1.7M monthly UV on Orange web video
13  50% of Orange cinéma séries use catch-up services properties
 ...staying ahead on the IPTV learning curve by overcoming all the business and
technical challenges of the past 7 years

technical and management challenges during

business
Orange 3P TV roll-
roll-out
challenge profitability
technical sales &
challenge
marketing
3m

service
content openness
subscribers

2m quality enrichment

multiple
platforms and
set top boxes
eligibility
1m ADSL Fiber

trial DTH Mobile

scalability
Single CMS
ADSL platform 1
connectivity ADSL platform 2
year 1 year 2 year 3 year 4 year 5 year 6
time

* content management system

14
thank you