France Telecom hit by entry of new mobile operator

PARIS Thu May 3, 2012 1:40am EDT

PARIS May 3 (Reuters) - France Telecom's revenue and operating margins deteriorated in the first quarter as its key home market was shaken by tough competition from a new ultra-low-cost mobile operator.

The former state-owned monopoly lost 615,000 net clients in France in the period after Iliad touched off a price war when it launched its aggressively priced Free Mobile offers in mid-January.

France Telecom confirmed its guidance for operating free cash flow of 8 billion euros ($10.52 billion) this year.

The group's overall revenue fell 1.8 percent to 10.92 billion euros, while earnings before interest, tax, depreciation and amortisation (EBITDA) reached 3.43 billion euros.

Analysts expected revenue of 10.81 bilion euros and EBITDA of 3.45 billion, according to Thomson Reuters I/B/E/S. ($1 = 0.7603 euros) (Reporting by Leila Abboud; Editing by James Regan)

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