UPDATE 1-F. Telecom says unlikely to increase payout in 2010

* Says dividend to remain stable

* Says remains committed to dividend increase

* Says will not enter South Africa, Nigeria

* Sees not many attractive targets in Europe

By Nicola Leske

BARCELONA, Nov 18 (Reuters) - France Telecom (FTE.PA) said it will most likely not increase shareholder payout next year but reiterated it remained committed to increasing dividends in the long run once the economy improved.

Chief Financial Officer Gervais Pellissier said at the Morgan Stanley TMT conference in Barcelona on Wednesday it will be difficult to reach the goal of a higher dividend next year.

"This intent cannot be fully executed in 2010," he said, but added the dividend would remain stable and that the payout would increase again by 2011 if the economy improves.

In July, Pellissier said the dividend for 2009 should be the same as for 2008 -- 1.40 euro ($2.10).

France's leading telecoms player has promised to continue its policy announced in March 2009 of a distribution rate of 45 percent or more of organic cash flow combined with a policy of selective acquisitions, focusing primarily on markets with high growth.

Pellissier said France Telecom wants to continue its foray into Africa by acquiring a struggling operator or buying a new license but will stay out of South Africa and Nigeria.

"We could either buy an operator that is not in such a good shape or buy a green field licence," Pellissier said.

"We will not enter South Africa, we will not enter Nigeria," he said, arguing France Telecom wanted to avoid countries where the size of the investment compared with the risk was too big.

France Telecom is present through stakes in quite a few African markets, the biggest one is Mobinil in Egypt, others include countries such as Senegal, Ivory Coast, Mali.

France Telecom hopes to save some 1.5 billion euros from restructuring by the end of 2011 and also plans to continue with its portfolio reduction.

Asked about consolidation, Pellissier said that while he would like to see more market consolidation there were not many possibilities in Europe "that are attractive to us".

France Telecom last year was forced to ditch a $40 billion hostile bid for TeliaSonera (TLSN.ST) after a dismal market reaction.

(Additional reporting by Leila Abboud in Paris; editing by Elaine Hardcastle)