1. France Telecom R&D – February 2004 France Telecom R&D Far ahead and close to you

2. France Telecom R&D – February 2004 France Telecom today

3. France Telecom R&D – February 2004 n Present on 5 continents n More than 113 million customers worldwide n More than 113 million customers worldwide* n Global telecommunications solutions through strong brands leaders on their markets : wireless, Internet, fixed-line, multinationals solutions... A global group * In companies controlled on 30/06/2003 Who are we ?

4. France Telecom R&D – February 2004 Market positioning n n Mobile phone leader in France and UK with 45.6 million customers worldwide * n n Internet access leader in France and UK and N°. 2 in Europe with 8.8 active clients* (include 1.8 million broadband access customers) n n Fixed services leader in France and among the European leaders with 49.7 million customers worldwide* n n Worldwide leader in IP and data services for multinationals (*) end June, 2003 Who are we ?

5. France Telecom R&D – February 2004 Results in the first six months of 2003* n Turnover: 22.9 billion euros (+1,7%) n EBITDA: 8.5 billion euros (+23.5%) n Operating results: 4.6 billion euros (+46%) n Net income – Group share: 2.5 billion euros * historical data Financial results of the Group Significant imporvement in profitability in 1st half of 2003

6. France Telecom R&D – February 2004 2002 Annual Results* n Consolidated turnover: 46.6 billion euros (+8.4%) n EBITDA: 14.9 billion euros (+21%) n Operating results: 6.8 billion euros (+30.9%) n Net income – Group share: -20.7 billion euros * données pro forma Financial results of the Group

7. France Telecom R&D – February 2004 OrangeWanadooEquant Fixed services & distributionNetworks Our activities What we do

8. France Telecom R&D – February 2004 France Telecom organization FT 2005 Financial rebalancing and value creation Franck Dangeard Stéphane pallez FT 2005 Technologies, Strategic Partnership and New Usages Didier Lombard Marc Fossier FT 2005 Development and Optimization of Human Competencies Olivier Barberot FT 2005 Marketing and Branding Coordination Didier Quillot Regulation Jacques Champeaux Thierry Breton CEO Thierry Breton CEO Finance Michel Combes Human Resources Bernard Bresson General Secretary Jean-Yves Larrouturou External Communications Marc Meyer Management Networks & Internal Communication Olivier Barberot Networks, Carriers & IT Jean-Philippe Vanot Technology and Innovation Pascal Viginier TOP Program Jean-Paul Cottet Content Aggregation Patricia Langrand Sourcing Louis-Pierre Wenes Entreprise Communication Services Barbara Dalibard Home Communication Services Olivier Sichel Personal Communication Services Thierry Breton Sanjiv Ahuja Sales and Services France Michel Davancens (Michel Combes) International Jean-Paul Cottet

9. France Telecom R&D – February 2004 France Telecom R&D (ex CNET) Far ahead and close to you

10. France Telecom R&D – February 2004 A leader in telecom R&D Who we are n More than 3,000 researchers and engineers n 14 sites across the world n Some 600 million euros dedicated to R&D n More than 6,500 patents in France and abroad n approximately 15 start-ups created

11. France Telecom R&D – February 2004 Laboratories on 3 continents Who we are 1 center in San Francisco 8 centers in France 1 center in Tokyo 1 center in London 1 center in Boston 1 center at TPSA A team in Beijing An office in New Delhi An office in Seoul

12. France Telecom R&D – February 2004 2003: WiFi, Giga-Eternet, SMS on fixed phones, TV over ADSL… 2002: eConf, mobile VPN 2001: NABN, Le Messager, geolocalisation 2000: first WAP services, first UMTS and NGN tests 1999: Very High Speed Internet 1997: Prepaid mobile cards (Mobicarte) 1997: high speed ADSL Internet trials 1993: first digital TV transmission 1987: launch of ISDN 1982: launch of GSM 1981: test of the Télétel et Minitel online services 1978: inauguration of the Transpac data network 1960: first satellite TV braodcast 1953: first TV broadcast by radio (with England) Cultivating innovation Who we are

13. France Telecom R&D – February 2004 n Satisfy all clients Deliver effective innovations to all intra-Group clients n Develop and leverage our intellectual property Increase and enhance our patent portfolio n Achieve operational excellence n Be at the world’s top level for R&D capabilities and processes Our goals Who we are

14. France Telecom R&D – February 2004 Three complementary missions Our missions Imagine the unthinkable Improve the existing Prepare the impossible

15. France Telecom R&D – February 2004 n A Scientific Council n « Worldclass » research poles, such as: Network modelling, optimisation and dimensioning Technologies for digital and mobile communications Speech and sound technologies The Research Skills domains Usages & Ergonomics Security of information networks Mobile terminals and smart objects of the future

16. France Telecom R&D – February 2004 n Image n Security n E-commerce n Messaging services n Customer Intelligence n IPv6 n WiFi Bluetooth n Voice services n Terminals 13 Skills Centres Skills domains n Gateway & domestic LAN n Web services and Intermediation n GigaEthernet n Electromagnetism

17. France Telecom R&D – February 2004 n Mobile « Orange Cities » 3rd generation (2004)… n Internet WiFi, Alapage search engine (2003), Wanadoo Visio (2004)… n Fixed-line telephony Wireline SMS, « Ma Ligne » TV, « Ma Ligne » Visio (2003-2004) n Mobile / Internet Unified fixed-mobile mail service n Mobile Internet for companies, Instant Messaging etc. n Networks MMS Exchange… R&D in every offering In practice France Telecom R&D created 70% of the products & services sold by France Telecom

18. France Telecom R&D – February 2004 n Communicating clothes n Remote diagnostic and surgical strategy with the Argonaute 3D operation n Clones in a network n Perfumed Internet n Electronic voting n E-Tourism Prepare the services of tomorrow In practice

19. France Telecom R&D – February 2004 Collaborative R&D

20. France Telecom R&D – February 2004 Networking and partnerships n Industrial agreements around the world n Close ties with the international research community n Partnerships with leading universities n Active participation in defining standards Collaborative R&D

21. France Telecom R&D – February 2004 Industrial partnerships n With global industrial groups Telecom sector: Cisco, Nokia, Alcatel, Microsoft, Ericsson, Motorola, etc. Clients: AXA, Renault, Paris public transport, Disney etc. n and highly innovative companies Juniper, Highdeal, Netcelo, Netcentrex, Telisma, Wokup, etc. n Our goal: to jointly develop highly innovative products, protocols and services Collaborative R&D

22. France Telecom R&D – February 2004 Participation in standardization procedures n Promoting international standards Mobile standards, IP VPN services, xDSL etc. Cooperation with international bodies such as IETF, ETSI, ITU and 3GPP n Regular sharing of expertise Participation in international fora Collaborative R&D

23. France Telecom R&D – February 2004 Close ties with the research community n France Telecom R&D is deeply involved in international research programs European R&D Framework Program Eurescom French national networks (RNRT, RNTL, etc.) Eureka projects n Scientific Council Scientific Council including leading international members of the research community Collaborative R&D

24. France Telecom R&D – February 2004 Partnerships with leading universities n Various types of partnerships With the best universities and laboratories in France With foreign universities on three continents n 10 key partners around the world Europe: INRIA (France), University of Delft (The Netherlands), Ulm University (Germany), University of Budapest (Hungary), University of Salford (Manchester, UK) USA: MIT, University of Stanford, University of San Diego, University of Santa Clara Asia: Tsinghua University of Beijing (China) Collaborative R&D

25. France Telecom R&D – February 2004 n Loin devant et proche de vous Our perspective And tomorrow? n Far ahead and close to you