FRANCE TELECOM DEFIES COMPETITION TO INCREASE TURNOVER.

The public operator France Telecom recorded unprecedented growth in global traffic in 1998 (9.2% compared with 6.6% in 1997) and a 5.2% increase in turnover, from FF153.6 billion (Euro 23.4 billion) to 161.7 billion (Euro 24.6), despite the introduction of competition in France as indeed across most of the European Union on January 1. Turnover had risen by 2.4% in 1997. Some sixty licences have been issued to private operators, but their presence only really began to be felt at the end of the year. France Telecom reports that its competitors held about 5.1% of the market for long distance national and international calls in December, compared with just 1.7% six months earlier. The public operator began to feel the impact of the arrival of competition over the fourth quarter, with a slight levelling off in growth of telephone traffic (+8.5% compared with +9,5% over the first nine months of the years), a sign that competing networks, notably Telecom Developpement, and the Cegetel network, "7", are beginning to attract an increasing share of traffic. Competition has however had a broadly positive impact for the entire market, increasing use and uses of the telephone, not least with the rapid expansion of mobile telephony and Internet access via telephone lines.

Turnover from mobile telephony (FF24.5 billion or Euro 3.7 billion) now accounts for 15.2% of the overall figure, compared with 11.1% in 1997. France Telecom's Itineris service gained 2.45 million new subscribers in 1998 (+82%), compared with 1.7 million the previous year, but lost...