France Telecom R&D Far ahead and close to you

1. France Telecom R&DFar aheadand close to you France Telecom R&D – February 2004

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

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

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

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

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

7. What we do Our activities Orange Wanadoo Equant Fixed services & distribution Networks France Telecom R&D – February 2004

8. Finance Michel Combes EntrepriseCommunicationServices Barbara Dalibard FT 2005 Financial rebalancingandvalue creation Franck DangeardStéphane pallez FT 2005 Technologies, Strategic Partnershipand New Usages Didier Lombard Marc Fossier Human Resources Bernard Bresson ManagementNetworks & InternalCommunicationOlivier Barberot HomeCommunicationServices Olivier Sichel General Secretary Jean-Yves Larrouturou External Communications Marc Meyer PersonalCommunicationServices Thierry BretonSanjiv Ahuja Thierry Breton CEO Networks,Carriers & IT Jean-Philippe Vanot Sales and ServicesFrance Michel Davancens(Michel Combes) RegulationJacques Champeaux Technology and Innovation Pascal Viginier Sourcing Louis-Pierre Wenes FT 2005 Marketing and BrandingCoordination Didier Quillot FT 2005 Developmentand Optimization of Human Competencies Olivier Barberot International Jean-Paul Cottet TOP Program Jean-Paul Cottet Content Aggregation Patricia Langrand France Telecom organization France Telecom R&D – February 2004

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

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

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

12. Who we are Cultivating innovation 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) France Telecom R&D – February 2004

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

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

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

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

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

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

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

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

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

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

23. Collaborative R&D Close ties with the research community • 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 • Scientific Council • Scientific Council including leading international members of the research community France Telecom R&D – February 2004

24. Collaborative R&D Partnerships with leading universities • Various types of partnerships • With the best universities and laboratories in France • With foreign universities on three continents • 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) France Telecom R&D – February 2004

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