1. Idate, November 24, 2004 European enlargement and ICTs Industrial Issues: Direct investement. Company case studies Jean Paul Simon, Vice-President International Regulatory Strategy, International Public Affairs, France Telecom 26th International Conference, Idate Montpellier, November 24, 2004

2. Idate, November 24, 2004 2 Why: some hints (1)  Western operators are looking for some new engines of growth:  New regions: Accessing countries/ New Members States (NMS)  New sectors: after mobile, broadband…  The telecom sector is key for overall competitiveness: fostering growth thereby demand  NMS and accessing countries are perceived as:  Strong growth, major potential, reasonable risk markets

3. Idate, November 24, 2004 3 Why: some hints (2)  Providing « test markets »:  If one is not efficient in these markets (prices, technology, solutions/ applications, bundles…)  Not likely to be efficient in major emerging markets such as China, India  From a regulatory point: integration of the « acquis communautaire »  Familiar environment: abiding by the same rules

4. Idate, November 24, 2004 4 Results & Issues  The NMS are pressured to achieve in a few years what took over 20 years in old Member States  Some structural differences  A low penetration rate for wireline (around 30%)  A higher penetration for mobile (around 60%)  What about the incentives to invest: how to stimulate the deployment of networks (including broadband)  Especially if the main issue is demand: low level of income/ low willingness to pay  May trigger some different treatment: unchanging trends/ unchanging differences

5. Idate, November 24, 2004 5 Always be ready for any surprises in life...