Drop in profits for telecom firm

Paris: France Telecom SA said it sees a drop in profit margins this year as it gears up for a mobile-phone rival in its home market in 2012.

France’s biggest phone company, which reported 2010 profit that was slightly better than analyst expectations, said it sees a 1% point slide in 2011 margins for earnings before interest, taxes, depreciation and amortisation.

The “risk profile in both fixed and mobile is increasing” in the French market, Saeed Baradar, a telecommunications sales specialist at Societe Generale in London, wrote.

Chief executive officer Stephane Richard is looking to guard market share and margins at home, where Iliad SA will start offering mobile services next year.