France Tel to keep content strategy in 2010 -paper

Fri Feb 5, 2010 3:33am EST

PARIS Feb 5 (Reuters) - France Telecom FTE.PA plans to maintain its strategy of investing in exclusive broadcast content this year, but could revisit it when the rights to French football are next auctioned in 2012, Les Echos said on Friday.

In a presentation obtained by the newspaper, Xavier Couture, who heads the content business, said France Telecom would in 2010 "pursue its development of TV channels edited by Orange."

A spokeswoman for France Telecom declined to comment. But it is clear that a wide review of the group's content strategy is under way, people familiar with the matter have told Reuters.

Incoming CEO Stephane Richard has said he would re-examine France Telecom's approach of buying exclusive rights to movies, TV, and sports and offering them to its clients as a way to differentiate itself from competitors. [nLDE6122M6]

The content strategy, which has yet to prove that it can generate profits, has also been dealt regulatory setbacks this year as French authorities and courts examined whether it distorts competition. [nLDE60A24Y]

Investors have been closely watching for signs that Richard might change France Telecom's approach to content because if he scales back spending, it might boost profits.

Under current CEO Didier Lombard, the group spent at least 400 million euros acquiring the exclusive rights to content including the Saturday night match of France's top football league, HBO series, and Warner movies.

One option being studied by France Telecom is to bid on spectrum for a digital pay-TV channel. [nLDE60I0SK]

Such an approach might pose less of a problem to regulators, while allowing France Telecom to keep its exclusive rights and not licence them to competitors, said a person close to the situation.

The telecom operator's rivals Vivendi (VIV.PA) and Iliad (ILD.PA) have criticised France Telecom's strategy as anti-competitive, and attacked it in court and in front of regulators. Iliad also tried but failed to force France Telecom to licence its football and movies.

(Reporting by Leila Abboud; editing by John Stonestreet)

((leila.abboud@thomsonreuters.com; + 33 1 49 49 51 82; Reuters Messaging: leila.abboud.thomsonreuters.com@reuters.net)) Keywords: FRANCETEL/

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