Investors have welcomed plans by France Telecom to double its dividend and continue cutting costs and debt.
The moves are part of a much-anticipated new three-year growth stategy plan. The once debt-crippled telecoms firm is promising a dividend of one euro a share for this year, to be paid next year That is more than double the 2004 pay-out, which disappointed shareholders. Based on turnover last year, France Telecom is Europe’s third biggest phone operator after Germany’s Deutsche Telekom and Britain’s Vodafone. The French government has reduced its stake in the company from 56% to around 40%. Chief Executive Didier Lombard, who took over from Thierry Breton in February, said as part of the transformation programme, France Telecom will offer new services to boost revenue and aims to lift comparable sales by between 3% and 5% from 2006 to 2008. It will also switch to the Orange brand name for its mobile, international Internet and corporate businesses.