After the Signature of a Strategic Partnership France Telecom and Microsoft Today Unveil Two Major Initiatives

PARIS — July 6, 2005 — On June 29th, 2005, France Telecom and Microsoft announced a strategic deal to co-develop innovative products and technologies that enable customers to benefit from the new opportunities of the digital world through innovative convergent services.

As part of this partnership, Didier Lombard, Chairman and CEO France Telecom and Steve Ballmer, CEO Microsoft Corporation are presenting the first two initiatives in this strategic partnership.

First, France Telecom and Microsoft will cooperate on a next-generation service platform to enable the aggregation and delivery of a wide variety of services, including voice, video and data.

Digital convergence brings many new opportunities for users to utilize multiple devices across many different networks. There is a need for next-generation service platforms, for triple play and beyond, in order to evolve from side-by-side services, and provide users with a much richer experience, giving the liberty to combine TV, voice over IP (VoIP), instant messaging (IM), presence, content, and many other services simultaneously and with great flexibility.

This service platform, using the Microsoft Connected Services Framework, is designed to provide a foundation for building and managing complex services using a service-oriented architecture (SOA) and Web service interfaces. France Telecom plans to aggregate, provision and manage a range of new converged services for consumers and business customers, to enrich and simplify their everyday life, regardless of network or device.

By bringing together services developed by France Telecom and Microsoft software, as well as a broad array of third-party offerings and content, France Telecom plans to create new combinations targeting specific customer segments. France Telecom expects to develop differentiated offerings that are designed to attract new subscribers, build customer loyalty, and importantly, drive new revenue streams.

The second strategic initiative is a joint collaboration to bring customers in many countries a series of feature-rich, easy-to-use VoIP phones developed by France Telecom and based on Microsoft software:

  • LivePhone – the first WiFi broadband Smartphone developed by France Telecom for its Home segment – will be connected to the France Telecom home gateway (LiveBox) and services.

  • Homezone – developed by France Telecom – is a seamless service for communications on the move and at home, using a dual-radio GSM / WiFi mobile VoIP device which will evolve to become a Smartphone based on the Windows Mobile platform.

As part of the partnership, France Telecom and Microsoft will develop new advanced features and applications, enabling mobile information workers and consumers to access a broad variety of applications and services on the go as well as at home.

Didier Lombard, Chairman and CEO France Telecom today says: “With the NExT program and the ambitions it defines, France Telecom aims to build the future of telecom services and to become the preferred telecom services provider, by harnessing the potential of information technologies on integrated fixed, mobile and internet networks. The partnership between the world’s leading software company and France Telecom promises customers a New Experience of Telecommunications, with services that enhance their everyday life.”

Steve Ballmer, CEO Microsoft Corporation, today says: “This partnership demonstrates the commitment of both our companies to innovating and delivering the best services to customers. This is about accelerating convergence to provide consumers and enterprises with much richer and simpler experiences. Innovating together, we will deliver new digital devices and better integrated, end-to-end services that combine Microsoft’s expertise in software with France Telecom’s expertise in broadband and mobile networks.”

About France Telecom

France Telecom is one of the world’s leading telecommunications carriers, with more than 126 million customers on the five continents (220 countries and territories) at March 31, 2005 and consolidated revenues of 46.16 billion euros for 2004 (under IFRS GAAP). In Q1 2005, consolidated revenues totaled 11.62 billion euros (under IFRS GAAP). Through its major international brands, including Orange, Wanadoo, Equant and GlobeCast, France Telecom provides businesses, consumers and other carriers with a complete portfolio of solutions that spans local, long-distance and international telephony, wireless, Internet, multimedia, data, broadcast.

France Telecom is the second-largest wireless operator and Internet access provider in Europe, and a world leader in telecommunications solutions for multinational corporations. France Telecom (NYSE: FTE) is listed on the Paris and New York stock exchanges.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Microsoft is a registered trademark of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein maybe the trademarks of their respective owners.

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