France Telecom Cuts International Long-distance Rates and Introduces New Discount Plans - Company Business and Marketing

Cambridge Telcom Report, May 1, 2000

France Telecom (NYSE:FTE) has further reduced international long-distance rates for all calls made from fixed-line telephones(1). Following these cuts, calls to 20 countries in Europe and to the United States and Canada cost only 0.99 francs per minute during off peak periods (evenings and weekends) after the initial charge for a minimum call duration, and 1.64 francs per minute during normal rate periods (all rates include value-added tax unless otherwise specified).

For calls to most of Europe and to North America this represents a 20-percent cut during off-peak periods. This accounts for the majority of traffic to these destinations: three out of four calls are made during evening and weekend reduced rate periods. The reductions reach up to 43 percent for calls to certain countries, including Austria, Finland, Greece, Ireland, Norway and Portugal.

Rates are ven lower with France Telecom's international long-distance discount plans. With the Primaliste or Primaliste Pays rates, a one-minute call to Europe, the United States or Canada costs only 0.74 francs off-peak (after the initial charge for a minimum call duration). With the Mon Numero Prefere plan, a minute costs just 0.50 francs off-peak after the first five minutes.

These rate reductions reflect France Telecom's strategy of growing both the market and telephone usage. Consumers can now stay on the phone to the United States three times longer for the same price compared with three years ago: the cost per minute has dropped from 2.97 francs in March 1997 to 0.99 francs in May 2000. At a period when growing number of young people and students begin traveling abroad for summer jobs or language training, these lower international rates make it easier for their family and friends to stay in touch. Over 300,000 people have already signed up for the Primaliste Pays plan (discounts for all calls to a selected country) to take advantage of lower international rates.

Tropic' France plans: discounts for calls between French overseas departments and metropolitan France

France Telecom will launch its new Tropic' France discount plans on May 9, offering special reduced rates for calls between French overseas departments and metropolitan France. The discounts are available to residential customers and apply to calls in both directions.

Over 2.5 million customers regularly call between French overseas departments and France. Some 1.5 million people live in these departments, while one million people from the overseas departments now live in metropolitan France. The new discount plans make it cheaper for people to stay in touch with family and friends.

Tropic' France Discount Rates (effective May 9, 2000), per month,
                    in francs, including VAT

Tropic'      Calls from     Calls from French       Calls from
France Plan  metropolitan    Guiana, islands        Guadeloupe,
               France      north of Guadeloupe  Martinique, Reunion
----------- ------------   -------------------   ----------------
  1 hour         81 F              67 F                 73 F
  2 hours       158 F             132 F                143 F
  3 hours       229 F             192 F                208 F
  5 hours       360 F             301 F                327 F

 Lower rates for Libre Cours discount plans

Effective May 2, France Telecom is lowering the rates for its
Libre Cours discount plans. These plans offer reduced rates for
domestic long-distance calls.

Libre Cours discount rates, effective May 2, 2000

Libre Cours call time   Monthly charge, in francs, incl. VAT
------------------   ---------------------------------------
    2 hours           41 F                (previously 48 F)
    3 hours           61 F                (previously 69 F)
    5 hours           99 F                (previously 110 F)
    8 hours          153 F                 au lieu de 174 F

Customers who sign up for the Libre Cours or Tropic' France plans can make calls to family and friends across France or in French overseas departments during the periods people are most frequently at home and have time to talk, while minimizing their phone budget. The discount rates apply from 6 pm to 8 am weekdays and all day on weekends and holidays. Calls are billed at the normal rate over and above the inclusive call time in the plan. Customers can check their remaining call time by making a toll-free call to an interactive voice response system. France Telecom customer service agents are available (by calling 1014 in France) for a free "audit" to help people choose the plans that will save them the most money.

With an ever-growing portfolio of customized solutions, France Telecom continues to help people communicate more and to communicate more efficiently.

France Telecom is one of the world's leading telecommunications carriers, with 1999 consolidated operating revenues of 27.2 billion euros and operations in more than 75 countries. France Telecom provides businesses, consumers and other carriers with a complete portfolio of solutions that spans local, long-distance and international telephony, data, wireless, multimedia, Internet, cable TV, broadcast and value-added services. As of December 31, 1999, France Telecom had 56 million customers, including 14 million mobile subscribers in France, and through controlled subsidiaries worldwide. France Telecom has been listed on the New York Stock Exchange (NYSE:FTE) and the Paris Bourse since 1997. FMI: www.francetelecom.com.