France Telecom reported on Thursday a loss of US$7.3 billion for last year in a stark admission that it had overpaid for a pan-European expansion in the giddy years of the telecom boom.
Under its chairman, Michel Bon, France Telecom has spent tens of billions of dollars in the last two years on acquisitions and on wireless licenses to compete head-on with European giants like Deutsche Telekom and Vodafone of Britain, quadrupling the company's debt in the process. Since those deals, however, the share prices of telecommunications companies have slid sharply.
The loss for the year was a reversal from 2000, when the company earned 3.66 billion euros. The loss is the second-largest ever reported by a French company, behind the loss of of US$11.86 billion for last year reported by the media giant Vivendi Universal on March 5.
France Telecom has said that its strong operating cash flow -- rising 14 percent, to 12.3 billion euros (US$10.9 billion), in the latest year -- allows it to carry its heavy debt load. The company owns some premier assets, including Orange, Europe's second-largest wireless operator.
"Our business performance is on track," Bon said on Thursday, "and we are seeing the best results in our history. All the lights are green."