France Telecom investor day, June 10th 2004:
Building the integrated broadband communication services Group
Home Services presentation
What has been achieved since last Investor day
Announced in November 2003
! Reshape France Telecom, building a new organization close to the customer and leveraging global platforms

Achieved so far

! New organization structured around FT Home, FT Personal and FT Enterprise ! FT Home joined forces between fixed and Internet businesses in France (MGP and Wanadoo France) and abroad (e.g. Wanadoo Spain and Uni2) ! 86% of households eligible to 2 Mbps Broadband today ! Comprehensive range of renewed voice offers (44% of voice consumers with flat fee package) ! Wide range of broadband enabled innovative services (e.g. 5000 TV subscribers in France) ! 100,000 Wi-Fi gateways sold since launch Wi! 168,000 DECT terminals sold in 1Q04
Organization Organization
! Increase Broadband coverage ! Expand service offering for residential

Offers

Higher Broadband speed Converging address book Home gateway Multi-terminal video-telephony services MultivideoUnified messaging (email, voicemail) TVoDSL and VoD

Results

Maintain leadership position on French residential market Maintain leadership position on pros Strengthen position abroad
! +600,000 new broadband subscribers from 4Q03 to 1Q04 in France ! +300,000 new broadband customers in Qoutside France ! 70% market share on pros market in France
FT delivering as per its commitments
Offers recently announced
For June 2004 ! Unlimited usage call plans
from 9 (3#, E&WE) till 33 (all numbers, unlimited) per month including a contact management application
AN YE NO ST UN ER CE DA D Y AN YE NO ST UN ER CE DA D For August/September 2004 Y
! Unlimited voice over IP offer
at 10 per month for the first year bundled with Wanadoos ADSL access subscription
! 24/7 Voice over IP offering for Internet users
at 5 per month and 13 cents per call
! 2 Mbps Internet access at 34.90 per month

! New broadband offers:

2Mbps at 39.90 per month 1Mbps at 29.90 per month
! Domestic multi-service gateway
A brand new range of service offerings materializing FTs role in reshaping the residential communication market
are part of FT Home response to the evolving needs of its residential customers

1. Abundance

" I want to be able to communicate independently of time, location, duration " I need a faster Internet " I want unlimited use at good value

2. New services

" I want to be able to access on demand premium IP music or video " I want to be able to let my children surf the web with no worries " I would love to see my grandkids when I talk to them over the phone
Innovation on content and offers Quality, reliability, security Price attractiveness
3. Ergonomy and simplicity
of communication universe
" I want attractive devices to support my services " I want simple, easy-to-install boxes; I easy- towant plug and play " Technology must be an enabler, not a source of constraints " I want to access my services (like reading my messages) from all my devices
Abundance, new services and ergonomy for all FTs residential customers
Abundance means freeing up voice and Internet usages at the best price for customer

Abundance on Voice

Package offers Tariff plans Flat rate call plan Unlimited offers
! Customization: One solution for each identified need
! Technology seamlessness
Convergence of PSTN and VoIP offers
Abundance on Broadband Internet
! Innovation through increase in bandwidth capacity
2Mbps available to 95% of French population at very competitive prices Bandwidth accelerator to experience 2Mbps
! and accessibility for everyone
Broadband available for everyone with an entry price at 14,90 Abundance and seamlessness at the heart of FT Home offers, both on voice and on broadband Internet
Abundance on Voice means a voice offer for every need

Chosen duration

"Call the way I want without surprise"
From a customer specific need

Exact duration

"Call whenever I want at the best price"

Unlimited duration

"Call as much as I want"
to a FT Home matching offer

Package offers

Les heures locales Les heures nationales Les heures vers mobile

NE NE W W

"Le Plan"
Appel prix unique Unlimited offers Tarifa plana
FT Home proposes adapted offers, matching all market segments needs
Abundance regardless of technology
Our customers care about price & voice quality We select the technology to best fulfill their needs and ensure availability of best offers for all We ensure convergence of offers and tariffs We will accompany our customers by offering the best product in the long run

Switched voice

Internet based voice
New usages and related offers

Flat rate call plan

Unlimited calls
Example: Unlimited calls available either on switched voice or VoIP bundled with broadband internet access
Seamless offers between switched voice and Internet based voice
Abundance on Voice Flat rate call plan (Appel Prix Unique)

Customer demand

I am fond of long phone conversations, I want a unique price whatever the call duration Offer description Evening and WE on PSTN 24/24, 7/7 on VoIP Deal 0.13 / call for any call * Monthly subscription of 5

* Up to 2 hours per call

ALRE ALR A AVAILEADY AVAIL AVAILA DY AVAILAB ABLE IN BLE I J ABLE (PST N JULY LE (PSTN ) ULY 200 N 2004 (Vo ) 4 (VoIP) IP)
An innovative offer at a competitive price for any call
Abundance on Voice Unlimited offers
I want to be able to call my friends and my family as much as I want and when I want 5 offers on PSTN (June): 3 phone numbers 5 phone numbers 10 phone numbers 20 phone numbers All numbers
Evening & WE * 24/24 7/7 *
AV AVA AIIL LAB A & BLE I & A LE IN AUG N J UGU JU UST UNE ST NE 04 ( 004 ( 4 (V 4 (P VoI PST oIP STN P)) N) )

* Prices per month

A new offer on VoIP (August): all numbers for 20 * bundled with Wanadoo unmetered ADSL access 24/24, 7/7 2nd line with 2nd phone number (087) connected to the gateway

Launch promotion:

10 per month during the 1st year
Unlimited voice, both on PSTN and VoIP
Abundance on Internet FT offers a full range of products and broadens the bandwidth capacity for all customers

FT Home promises

FT Home proposes, starting in June, an offer at 2 Mbps on all areas covered by broadband, for 39.90 per month Bandwidth capacity

Indicative prices *

128 Kbps
With FT, broadband Internet access starts at 14.90
Enabling ADSL Internet experience for low income customers

14.90 24.90 29.90 34.90

512 Kps 1 Mbps 2 Mbps
In September 2004, FT Home will propose more attractive tariffs for all customers
* Prices per month, starting in September 2004
A strategy of rapid increase in capacity coupled with competitive prices
FT has been the first operator into bringing dual play to the Spanish market
Offers Service description
! Unlimited voice consumption, regardless of technology (already on PSTN, VoIP launch in 3Q2004) ! Tarification depending on 3 levels of geographic extension ! Similar services for companies
AL AL E R RE D A AD YA YA VA VA L II A LA L B BL E E

Pricing

! Residential customers:
miCiudad 24h 12/month miProvincia 24h 18/month Nacional 24h 45/month
Unlimited voice Tarifas planas
Bundle naveghable Voice + Internet
! Unlimited voice and Internet (ADSL or narrowband) consumption ! Tarification depending on: Bandwidth capacity, from 54 to 256 Kbps Geographic extension choice: city, province, country
! From 25.9 per month (narrowband+unlimited voice in city area) ! to 69.9 per month (256 Kbps+unlimited voice with national coverage)
A wide range of value added services is opening the way to a new communication world
Enhanced telephony Enriched messaging

Communication

Video-telephony Converging address book Firewall

Security

Parental control Antivirus / Anti-spam Online gaming Photo album

Entertainment

Music download manager TV / VoD (MaLigneTV)
Similar services set launched progressively in all countries

New services enhancing customer experience Enhanced telephony and messaging services
Telephony services Telephony services House moving number portability Call identification ! An offer that allows customers to keep their number when they move houses ! Available within the same local area ! Displays the name and number of the caller ! Already subscribed by 4 million subscribers (+20% yoy)

# Done

Virtual lines
! Each member of a family with ADSL access can have ! Coming his own telephone number ! SMS fully interoperable from fixed handset to fixed handset ! Same service between fixed and mobile ! SMS - email interoperability ! MMS service (Photo, Text, ) from fixed terminal to fixed, mobile or e-mail ! Voicemail service which enables delivery of non intrusive vocal messages ! Box-to-box voice messaging (Message Express) ! Convergence of voicemail between fixed phone and email
# Done ! Coming ! Coming ! Coming # Done # Done ! Coming
Messaging services Messaging services 14

Voicemail convergence

New services enhancing customer experience Video-telephony services V

Videotelephony on PC

3 V3 AV AV I AL JU AILA L JU E AB L N NE 20B E IN 200 E IN 04 4
AV A A O C VA I A O C IL A TO L B L TO BE BLE B E E IN R 2 IN R4
Videotelephony from dedicated terminal
Comprehensive communication service ! Videotelephony, telephony and instant messaging ! PC based Since April 2004 ! Free call from PC to PC ! 3 packages (5, 10 & 15) for PC to Phone call June 2004 ! Phone to PC call and allocation of 087 numbers Going forward ! Interconnection with Wanadoo address book
Comprehensive communication service ! Videotelephony, telephony and video-messaging on dedicated terminal Starting October 2004 ! Global offer encompassing DSL subscription, service subscription and video-telephony communication package ! Videophone to buy or to rent ! interactive end-user guide Going forward ! video kiosk services
Convergence of offers, interoperability and coherent pricing

Personalization All my contacts accessible and voice reachVAI AV S A AL

Main features

! Voice recognition
EP A SE T ILA PT M BLE E EM E LE IN B B BE 2 IN R R4 004
Just say Mummy or "Christine Duval" to get immediately connected to your correspondent
! My universal address book
Can be used from my phone, but also directly from the Internet
! Innovations to be launched
Contact automatically added after a call to 12 or a search on PagesJaunes.fr Box-to-box message (Messages Express sent in voice mode) Video-telephony
Going forward, FT will propose a single address book
Internet new services enhancing customer experience Serenity suite in France
"ANTI SPAM PLUS" OFFER NEW "ANTI SPAM PLUS" OFFER NEW ! Improved comfort with mailbox ! Improved comfort with mailbox usage usage ! and ability to protect ! and ability to protect intimacy intimacy COMPLETE "SERENITY SUITE" COMPLETE "SERENITY SUITE" ! Antivirus ! Antivirus ! Firewall ! Firewall ! Spam-blocker ! Spam-blocker ! Parental control ! Parental control
Site-screening Site-screening Ability to restrict access to Ability to restrict access to a predefined list of websites a predefined list of websites

Key facts and figures

! 34,000 activations in 4 weeks (1,5 / month VAT incl)
Customer need for security and comfort services
! 350,000 clients pay for a "serenity" service (5 / month ARPU)
More than 10% of customers take one major service option 17% for broadband customers Between 15 & 20% of new customers buy this service with their subscription
Internet new services enhancing customer experience Serenity suite and other VAS in the Netherlands
SPECIAL SECURITY OFFER: SPECIAL SECURITY OFFER: ! Antivirus Mbx at 1.95 ! Antivirus Mbx at 1.95 per month per month ! Antispam Mbx at 0.95 ! Antispam Mbx at 0.95 per month per month ADDITIONAL VAS OFFER: ADDITIONAL VAS OFFER: ! Premium e-mail ! Premium e-mail

Premium services Premium services Webmail Webmail
! 6 VAS launched since August 2003, 3 more services in the coming months ! Over 100,000 VAS sold in 8 months, ie an average of over 11,000 VAS per month
Customer need for security and value added services
! SMS notification ! SMS notification ! Private domain names ! Private domain names ! Web hosting ! Web hosting

! Results:

More than 10% of Wanadoo Netherlands customers take one major VAS option More than 15% of the broadband customers subscribe to a VAS option
Enhancing customer experience through entertainment offers Gaming
Offers Key facts and figures
! FT Home is European leader in Massively Multiplayer Games market ! Dark Age of Camelot: launched in February countries and 3 languages: French, English and German 350,000 games sold 80,000 paying subscribers * 30,000 simultaneous players

Positioning

! Portfolio Strategy: Exclusive partnership with 1or 2 major entertainment company
Massivelymultiplayer Games

Casual gaming

! The biggest community of casual gaming players 500,000 players per month 20,000 sales per month ! 1.5M downloaded games per month
! Bundles strategy: content linked to access i.e. Wanadoo is the only operator in Europe to launch a Video Games option
* Wanadoos main competitor has only 15,000 paying subscribers 19
Enhancing customer experience through entertainment offers Music
! Catalogue of 330,000 tracks available (mix of old and recent tracks, ! Tracks classified by type & alphabetical order, including a search engine ! Different possibilities for the user:
Free listening to an extract of 30 sec. max Listen in streaming Download on PC Record and compile the tracks
! Partner: OD2 ! Payment with WHA (FT secure payment solution)

Music tracks to download

Enhancing customer experience through image VoD offers in France
! Recent movies selection (6 months after release in theaters) to watch anytime on PC ! Rent during 24H, in streaming or download mode
! Partner: Netcin (MovieSystem) ! Catalogue extension in Q(Universal and Studio Canal) ! Subscription offer in Q! Payment with WHA
"A la carte" videos
! A choice of 250 movies with attractive prices:
Recent movie: 3,99 Movie from catalogue: 2,99
! An average of over 8,000 movies sold per month
Enhancing customer experience through image VoD offers in Spain
! Offers: WanadooTV.com: short movies, best TV programs extracts, a la carte videos, music tracks, etc. Telecinco.es: videos with the best moments of the daily TV programs ! Results: Telecinco.es has been the leader of the TV websites in Spain since 2002 Average of over 600K videos streamed monthly in 2004 on wanadootv.com Average of over 1,200K videos streamed monthly on telecinco.es Average of 4,200 videos sold monthly in 2004 using SMS ! Prices: 0.9+VAT for short movies Between 4 and 6 per video

! Partners: Telecinco, RTVE ! Revenue source: pay per view, pay per play, pay per download, pay per listen, advertising, content aggregation (telecinco.es), etc. ! Catalogue: Music: over 600 video clips TV spots: over 200 Sports: over 100 ! Payment per SMS, Visa, prepayment card, virtual money (Ms)
Broadband portal with dedicated channels
Joint Venture with leading Spanish TV channel Telecinco
Enhancing customer experience through image TV on DSL
! A double offer: MaLigneTV, a service for VoD and TV programs at 16 per month Optionally, access to a TV package of 80 channels at 21 per month
! Simultaneous: broadband access and TV
! Easy: no delay for installation, no dish
DTV (digital television) offer through a DSL access
! Roll-out: Lyon in December 2003, Paris in March 2004, with TPS Marseille, Nice and Nantes in June 2004, with TPS Next steps with Canal Satellite: in the Paris area as of midJune 2004, in other selected cities starting in September 2004
! Quality & Choice: Digital TV + prestigious TPS offer with 7 movies channels and over 70 other channels
! Reliability: dedicated canal
A wide range of new handsets will improve ergonomy and stimulate usage of new services
6 color screen handsets launched in June 2004 Video-telephony
" " " "
Color screen devices starting at 99 Partnerships with Sagem, Alcatel, Siemens All new DECT compatible with SMS By October 2004, all DECT>100 will feature a color screen
" Video-phone at 3Q04 " New devices collection at 4Q04
FT Home is the leader in the handsets market
New handsets - attractive device at accessible price

Logicom, Linea 250

3 key features
Colorful handset Large screen Up to 80 contacts in your address book Compatible SMS

Extra Target

All segments

Characteristics

Price VAT incl : 49.99 Color: Coral Already available
New handsets the most mobile among fixed phone, with colors

Siemens, SL100 color

Color screen Compatible SMS full duplex Vibrator, earphone Mobile size
Mobile addicted Price VAT incl : 179.99 Color: Expresso Availability: June 14th, 2004
New handsets the first multimedia phone

Siemens, SL740

Digital camera included Picture of the caller is shown on the handset Color screen 1,6" MMS
Technofans Price VAT incl : 199.99 Color: Silver Availability: June 1st 2004

New handsets videophones

Large color screen Hands-free speaker mode Address book Privacy control mode Video in/out connection to share digital pictures, videos Customers looking for usage comfort on a dedicated terminal Price VAT incl :
<200 (buy) <7/month (rent)

Extra

Target
Color: white Availability: October 2004
The Home Gateway addresses customer needs for simplicity of devices
Proliferation of domestic equipments

A solution: the gateway

Laptops / desktops

Voice on PSTN

" New broadband multipurposes communications services access point " Single access point that connects all the equipments " Wireless-enabled to best accommodate multiple terminals and user mobility " Remote device management capability
Voice over IP (additional line)

LAN LAN

GATEWAY

Mobile/PDA

Video Phone

Video game console

Facilitating the management of multiple equipments and services: interoperability, personalization, provisioning.
FT Group already has a best-in-class WiFi experience
Number of units sold since launch Nov. 2003: Nov. 2003: Launch of the Launch of the
Wanadoo WiFi Wanadoo WiFi Pack in the Pack in the
Dec 2003 :: Dec 2003 Launch of the Launch of the
Wanadoo WiFi Wanadoo WiFi Pack in Spain Pack in Spain
Over 100,000 WiFi routers sold as of June 1st, 2004
June-Sept. 04: June-Sept. 04: European European launch of the launch of the Triple play Triple play WiFi RG1 WiFi RG1

100,000

Oct 2003 :: Launch of Oct 2003 Launch of the Orange/ Wanadoo the Orange/ Wanadoo co-branded WiFi co-branded WiFi access Pack (PCMCIA access Pack (PCMCIA

card )) card

Netherlands Netherlands
Dec 2003 :: Launch of the Dec 2003 Launch of the Orange/ Wanadoo HotOrange/ Wanadoo HotSpot-in-a-Box Pack Spot-in-a-Box Pack
(WiFi pack (WiFi pack enabling enabling deployment of ones deployment of ones own Hot Spot )) own Hot Spot
May 2003: Launch of May 2003: Launch of Wanadoo WiFi Pack in Wanadoo WiFi Pack in France France
(1st all-in-one WiFi offer by (1st all-in-one WiFi offer by an ISP in France :: Wireless an ISP in France Wireless modem + USB dongle) modem + USB dongle)

Oct 2003 :: Launch of a Oct 2003 Launch of a
co-branded WiFi pack co-branded WiFi pack compatible with the Sony compatible with the Sony
March 2004:: Launch of March 2004 Launch of the TPS/ Wanadoo the TPS/ Wanadoo
WiFi Pack to access both WiFi Pack to access both Internet & TPSL Internet & TPSL
PS2 gaming console PS2 gaming console
Dec 2003 :: Partnership with HP, Dec 2003 Partnership with HP, Dell & Intel to promote WiFi use Dell & Intel to promote WiFi use

May 2003

Oct 2003

Nov. 2003

Dec 2003

April 2004

June 2004
The gateway allows for any combination of services

INTERNET

VIDEOTELEPHONY

Bluetooth

Router Router

IP network

VoIP VoIP Digital TV, VoD Video Telephony

RJ45 RJ45 RJ11

DIGITAL TV, VoD, GAMING
12-month roadmap in France
QVoice services PSTN VoIP

APU offer

Q3 2004

Q4 2004

Q1 2005

Q2 2005

Offres dabondance les Illimits Le Plan APU VoIP VoIP unlimited New BB tariff offers
Upgraded tariff plans / usage enhancement features Virtual number service Enriched features Gradual bandwidth increase / Dynamic bandwidth allocation features

Internet services

ADSL 2 Megas ADSL 1 Mega volume

TV services

Canal + PVR
MaLigne TV France geographic extension
Service enhancement through partnership

Terminals/Gateway

Gateway Continuous launch of terminals supporting new end user services Convergence of terminals
Video-telephony Messaging Address book
MaLigne Visio+ V4 visio MMS NB MMS BB VoiceMail web access Enhanced Message express Mes contacts (Wanadoo) Mes contacts (Fixe FT) Visio+ V3 Antispam Antivirus Mail
Unified messaging offer Mes Contacts convergence

New usages

Security Kiosques
Homewatching Service enhancement through partnership

Gaming Music Photo VoD

Video games option Music Download manager Enhanced VoD offer Voice + Internet Internet + TV Voice +Internet + TV

Enhanced photo offer

Multi-play
FT Home relies on a unique pan-European footprint

Challenger #1

" Internet subscribers: 2.6 millions " Internet penetration: 50%
" Internet subscribers: 0.6 millions " Internet penetration: 63%

#1 Incumbent / Leader

" " " Fixed telephony clients: 25.5 millions Internet subscribers: 4.6 millions Internet penetration: 35%

Incumbent / Leader

" Fixed telephony clients: 10.7 millions " Internet subscribers: 1.5 millions " Internet penetration: 26%
" " " Fixed telephony clients: 0.7 millions Internet subscribers: 1.5 millions Internet penetration: 30%
#2 #3 Access Access Voice Voice
Data as of March 31st, 2004 Source: FT, Wanadoo, Jupiter Research
A European leader in broadband with 3.2 million broadband subscribers, of which 30% in countries out of France with high growth potential
High level 12-month roadmap - Europe

QVoice QQ4 2004

VoIP launch
Continued increase of bandwidth capacity

Internet

ULL deployment

Terminals / Gateway

Gateway launch Visio V4 implementation Migration towards Mail essentials single European platform
Premium email package Mijn contacten Security bundle Music download manager New Photo offer VoD VoIP +Internet
My contacts Mis contactos

Music Photo VoD

CPS Vo + Internet
Music download manager Enhanced photo offer

Multiplay

VoIP +Internet