Boston, MA - February 1, 2006 - Following France Telecom's recent announcement of an expected 2005 revenue shortfall, Strategy Analytics today published, "France Telecom Targets FMC and Downplays Need for Speed as VoIP and LLU Threaten Growth," highlighting the wider implications for the telecom industry.

The key reasons for the expected France Telecom revenue shortfall are rapid growth in competitors' unbundling local loops and VoIP subscriber numbers. The company is now downplaying the importance of investing in next generation FTTH and VDSL2 technologies, which are so heavily promoted by telecom vendors such as Alcatel, Ericsson, and Siemens.

"France Telecom's caution over high-speed Internet suggests that telecom vendors will struggle to meet sales targets with some incumbents," says Senior Analyst Martin Olausson. "If other markets develop similar competitive profiles to the advanced French market, telecom operators, such as BT and Deutsche Telekom, may come under similar pressure to re-state their previously announced Next Generation Network plans."