Stéphane Richard - Chairman and CEO Ramon Fernandez - Deputy CEO and Chief Financial and Strategy Officer Pierre Louette - Interim CEO, Orange Wholesale France and Purchases Fabienne Dulac - Senior Executive VP, Orange France Laurent Paillassot - CEO Spain Thierry Bonhomme - Deputy CEO, Orange Business Services

Daniel Morris - Barclays Nicolas Cote-Colisson - HSBC Bank Plc Dimitri Kallianiotis - Redburn Alexandre Roncier - Exane BNP Paribas Jakob Bluestone - Credit Suisse Andrew Lee - Goldman Sachs Stéphane Richard: Good morning. Thank you for joining our H1 2017 Results Conference Call. I would like first to give an overview of the key points of this first half before handing over to Ramon Fernandez, who will provide you with the details of our results. I will then take the floor to conclude before answering with the team your questions. So, I suggest we start with slide number four, which presents the main results of the first half. I'd like first to begin with saying that we see our H1 results as a very satisfactory, good and solid set of results and a very good performance across the Board for the Group. In H1, revenue and EBITDA kept improving thanks to better trend in almost our entire footprint. We think that we are reaping the fruits of our Essentials2020 strategy based on network superiority, premium services, and unmatched customer experience. We now serve a total of 269 million customers. This is an increase of 6.1 million in H1 thanks to a solid upturn of our mobile net adds in the African and Middle East region. Our 4G in Europe and the FTTH base showed strong growth of respectively 46% and 55% year-on-year, supported by the increase in data usage and thanks to the quality of our convergent offers. Also we pursued our diversification strategy with Orange Money, now with 32 million customers reaching for the first time more than 10 million active customers. As a result of this, our revenue grew by €222 million in H1 with clear acceleration in Q2. The better trend in this quarter is driven by France posting revenue growth 0.5% revenue year-on-year for the first time since 2009; Spain still accelerating on revenue to near 9% of growth; Romania posting double-digit revenue growth, 11% year-on-year; and Africa and the Middle East growing 2.7%, which is a clear improvement compared to Q1, which was only 0.7%. This positive revenue trend, together with our cost efficiency program, led to an increase in our adjusted EBITDA by 2.2% year-on-year in H1. Thus more than half of topline growth is preserved in profitability, increasing our telecom activities adjusted EBITDA margin by 0.4 points year-on-year. This performance is driven by strong dynamics in Spain, which registered a double-digit EBITDA growth, 15%, and France that is delivering adjusted EBITDA growth despite pressure on its topline. This very good performance allows us flexibility to keep our CapEx efforts up 3% year-on-year, as we sustain our investments in very high broadband. Consistent with our prudent and opportunistic approach of balance sheet management, we reduced our stake in British Telecom and simultaneously secured financing at negative interest rate, which enable us to keep our net debt to adjusted EBITDA ratio under 2, at 1.92 to be precise. Slide five, I'd like to focus a little bit on what is at the core of our strategy, high level of investments, cost structure management and discipline, which leads to differentiation and competitive advantage in all our markets. In order to keep our competitive advantage in connectivity, we continued our telecom investments efforts amounting to €3.3 billion in H1, 16% of telecom revenues with a €70 million year-on-year increase concentrated in France and in Africa and the Middle East. Given the common seasonality, this level of investment is consistent with our full year 2017 outlook at €7.2 billion. In France, the growth in CapEx was mainly the result of an acceleration in 4G, now covering 92% of population, and in fiber, with a total of 7.9 million connectable homes in France. The latest ARCEP survey confirmed our number one position for mobile network for the seventh year in a row, with Orange recognized as the best performer in 176 out of 193 metrics. In fiber, the growth in our investments was compensated for a large part by an exceptional growth of -- in co-financing from other operators linked to the fiscal incentives. On the regulatory front, ARCEP concluded that no specific obligations need to be imposed on Orange in B2C FTTH, thus confirming the symmetric nature of the regulation framework irrespective of Orange lead in fiber rollouts and subscribers. This is a confirmation of what we have already -- we have always said to the market regarding a possible regulatory shift. There will not be in France any asymmetric regulation creating specific constraints and damaging our economic model in FTTH rollout in France. CapEx slightly decreased in Europe, although it went up in Belgium, as we are winning new convergent customers on cable. In Africa, Middle East, the growth in CapEx is mostly due to 4G rollout with a total of 2,000 new sites deployed this semester, mainly in Egypt, Morocco, Ivory Coast, and Cameroon. On a broader view and in addition to the current CapEx optimization programs, we are now launching a lean CapEx initiative to further improve the cost efficiency of our investments. In the fall 2017, we will provide further details on this new CapEx program together with an update on midterm CapEx outlook, as technology is transforming our networks. Then, we will also update you on our ongoing operational cash flow optimization program and the progress of our Essentials2020 strategic plan. So, I look forward to seeing you during this fall. But without waiting, I would like to make it very clear that we are continuously looking for opportunities to optimize our cost base, as Ramon will illustrate in a few minutes using France as a case study. Slide number six. A few messages in this slide. The first is that our strategy is to leverage the best-in-class connectivity that we want to keep to develop usage and meet the expectations of our customers by offering an enriched experience and new services. Mobile finance is for us, as you know, a key diversification area and we are already delivering strong results with Orange Money in Africa and the Middle East, with revenue growing at 65% year-on-year in Q2. As you know, we are all focused now on the commercial launch of Orange Bank in France. I want to launch an innovative and quality product for our customers. And this is the reason why we are continuing the test to reach the criteria of excellence expected by the Group. We will launch as soon as those criteria in terms of quality and reliability are reached. During the back-to-school period, we will determine the launch date for the retail markets according to Orange France commercial agenda. In another fields, as a major and long-standing player in the field of content, we confirmed and strengthened our strategy with a creation of Orange Content. This strategy will be implemented, particularly in the European region with the idea of building what has been developed in recent years. I mean, giving priority to the widest possible distribution of the best content available on every market. This ambition in content has been confirmed by new agreements, especially the strengthening of our historical partnership with Canal+ and the launch of some investments in the coproduction of series. In H1, OCS, our Pay TV channel, renewed its agreement with HBO becoming the sole broadcaster of HBO programs in France. First, content is a strong tool to upsell and improve the loyalty of our customers while defending value and improving ARPU. So, in order to conclude, H1 2017 was very strong both from the financial and commercial viewpoint. We successfully executed our plan despite stiff competition and we are fully committed to, of course, keep doing so. I will now hand over to Ramon who will go into more details on our financial and operational performance.

Thank you. Thank you very much, Stéphane. Good morning. Before diving into each segment results, the slide number eight aims to emphasize once again the relevance of our convergence strategy. We are in a European market which is fast transitioning to convergence and with demand high quality networks both in mobile and fixed, together with the convenience of a single bill, a single point of service. And this is really the cornerstone of our strategy, which is based on household-centric convergence, network superiority, and customer experience. And it's more and more relevant. You can see with these figures and it's the second quarter that we are giving these figures, and we will do it on an ongoing basis. You can see that convergence is a strong acquisition tool. And it's strong both for initial and follow-on services. Because now we can see, for instance, we have a growing number of mobile lines per convergent contract. You can see the figures. It's more than 1.5 in all our major countries today. But we are also convinced that there is an upselling opportunity in lines of business other than connectivity such as content, as Stéphane just talked about it, IOT, financial services and other future adjacent services. So, convergence is very good for the top line. It's also a powerful retention tool resulting in a much lower churn for both fixed and mobile components with an economic benefit to Orange, which is much worth of a discount we have to provide compared to separate fixed and mobile contracts. And you can see here the benefits for three major countries in terms of churn levels. In terms of revenue, you can see here that we have very solid growth in all these countries. It's 12% across all the footprint. It's 9% in France, 13% in Spain, 26% in Poland. And so we are rolling out this new convergent family of offers, called LOVE in Spain, in Belgium, in Poland. And we now have close to 10 million B2C convergent contracts, 9.8 million to be precise. And this is growing at 11.5% year-on-year. So, convergence, absolutely key to be successful in Europe and this is our strategy. Now, if we look at the financial results, page nine. In terms of revenues, you see that in Q2, we had an acceleration at 1.4%. This is an increase of €138 million. And this is improving on Q1, which stood at plus 0.8%. This improving performance was observed in almost all of our footprint, with especially good results in Spain, in Africa, Middle East and Central Europe and also in France stabilizing and in fact doing -- going back to growth with 0.5% growth in the second quarter. This is the first time since 2009. And in France, this is due to a good performance in fixed broadband and wholesale, also to an increase of growth in equipment sales. In Spain, as Stéphane illustrated the point, we have now growth of 8.8% in the second quarter. It was 8.5% in the first quarter. It's an increase of €108 million. Africa, Middle East is back to good growth with 2.7%, which is plus €33 million. It was only 0.7% in Q1 and this acceleration is well on line with our expectations. Central Europe is growing strongly with more than 7% growth, mainly thanks but not only to very strong performance in Romania, and Belgium and Luxembourg has been increasing by 3.5%. If we turn to EBITDA, looking at telecom activities, this strong topline improvement but also our ongoing efforts on cost efficiency has allowed us to transform more than half of revenue growth into adjusted EBITDA, demonstrating once again that we can manage the right balance between growth and profitability. The adjusted EBITDA margin has improved by 0.4 point to 33.2% in Q2. This is thanks to a limited cost growth linked mainly to content and equipment costs, which are fueling high growth in handset and TV revenues. Also thanks to our pursued efforts on transformation by further improving our distribution, commercial and labor costs. And this includes, of course, the fact that full-time equivalent employees are decreasing by 2.7% in H1, mainly in France and in Poland. So, if we take as an illustration in the next slide the efficiency programs in France, and this is in the context that Stéphane highlighted of our continuous focus on ways to optimize our cost base, well in H1, in France, OpEx went down by €79 million -- its €79 million reduction compared to the first half of 2016, while revenues are up by €19 million. And this is resulting in a one point gain in adjusted EBITDA margin, which is very significant. And this comes as a result of our efforts to reduce cost in three areas: customer management, network production and maintenance and IT management. You have a number of illustrations on this slide. I'm just going to take one. And if you have questions, we will with Fabienne Dulac be able to come back to it. But if you look, for instance, at customer management, we have been working on reducing the number of interactions with Orange staff using a number of levels. One is, for instance, upgrading our smartphone application called Orange and me, Orange et moi, which has been registering 4.7 million unique visits in June 2017. And this is helping to substitute to potential calls to call centers and shops and a number of initiatives. If you take all of these, you see the results in the blue box, customer calls to service centers have been dropping by 20% in H1 compared to H1 2016. The share of online customer care interactions has reached almost 50% in June. This is a growth of seven points year-on-year and the share of online commercial interaction has reached 27.5%. So, all this, of course, is generating savings and is helping to accompany the reduction in the number of employees in France and being more and more efficient. So, we're going to follow-up on all these initiatives. Let's now turn to the net income, which is on slide 12. The net result from continuing activities has reached €830 million. This includes a €349 million depreciation of BT shares. Excluding this effect, the net income from continuing activities grew by €105 million, at close to €1.2 billion. This is up 10% year-on-year. This is the result of a better reported EBITDA, also of an improvement of the financial result, thanks to a lower cost of debt. The reported EBITDA increased by €317 million, thanks to a better adjusted EBITDA, also thanks to less adjustments than in H1 2016, contributing to an increase of €293 million of the operating income. This is up 14%. However, these positive effects were partly offset by an increase of taxes compared to last year, as the H1 2016 benefited from the positive effect of a tax litigation. Turning to slide 13 and balance sheet, you can see that in H1, we have been maintaining a very solid balance sheet with a net debt at €24.6 billion and net debt to adjusted EBITDA ratio stable at 1.92 leverage, which is fully consistent with our guidance of around 2 in the medium term. One word regarding Orange participation in BT Group. I remind you that we had a 4% stake in BT as part of a disposal of EE. We have a lock-up period of one year that ended last January. And so in June, we decided to manage our exposure to BT, we have sold one-third of our stake for €433 million. At the same time, considering the favorable equity-linked market conditions, we issued an exchangeable bond for another one-third of our stake in BT, allowing us to take advantage of very attractive financing conditions with a negative interest rate of minus 0.5% after return in euro for a four-year bond maturity. And then, we have another one-third of the stock that we kept. Our liquidity position remained strong with €14.3 billion at the end of June, including €8 billion of cash. Looking now at the business review, starting with France on slide 15. Well, we can see here we have a number of figures that despite a very challenging market, we have a very high level of promotions both in value and frequency. Orange France managed to grow its revenues in Q2 plus €22 million, plus 0.5% compared to minus 0.1% in Q1. This came from an improving trend in mobile service revenue, continued growth in fixed services, and also a favorable environment for customer equipment. Mobile service revenues improved. We have a decrease limited to 1.1% in Q2. It was going down 3.3% in Q1. This improvement is due to a slowdown in the decrease of national roaming revenues, also to the end of the adverse effect from the first wave of decrease in European roaming rates which had been starting in Q2 2016 and the end of this adverse effect together with an improvement in our high end versus low end mix explains the improvement of the mobile ARPU trend. Looking at fixed services, where we see growth of 1.1% in Q2. As this quarter -- and this is the first time ever, the very solid 5% growth in broadband revenues more than compensated the minus 10% decrease in PSTN. The growth in broadband revenues came as a result of a very good commercial performance, 74,000 net adds in Q2, together with a steady growth in ARPU at 1.4% this quarter. The latter being supported by an ongoing improvement in the product mix, growing fiber penetration together with the price increases we had in May and August 2016. At the same time, fixed wholesale revenues grew at 2.5% in Q2, supported from improving revenues from our civil works infrastructure, also the growth in unbundling the letter as a result of an increase in ULL tariff in January this year. Let's keep in mind that wholesale is the third business below of Orange France together with B2C and B2B. The convergent B2C revenues grew by 9%. And the EBITDA was up in H1 by €98 million. This is a growth of 3.2%, supported also by a favorable effect from the H1 2016 employee profit sharing and the employee share plan. But as we just saw before, the costs transformation effort is strongly supporting this performance. And in terms of CapEx, in terms of investment in France, they were up by €21 million. This is plus 1.3%. As we roll out 1.1 million additional fiber homes connectable and we roll out 2,300 new 4G radio sites this semester, achieving a 92% population coverage in 4G and also maintaining our 4G network leadership. In terms of commercial performance, once again despite aggressive promotions from competition in fixed, we posted a strong quarter of broadband net adds. As I said, 73,000 in Q2, of which 111,000 in fiber, 45% of those being new customers to Orange. 85% of all Orange customers eligible to fiber already subscribed to our fiber. This is up 0.3 point year-on-year. With fiber now representing more than 15% of our broadband customer base, this is up 4.2 point year-on-year. In mobile, also very competitive with some unlimited or quasi-unlimited data bundles available in the market. Well, we have seen net adds on our mobile contracts remaining very strong with a plus 111,000 net adds, excluding M2M in Q2, with a controlled minus 0.5% erosion in contract ARPU as we engaged in some tactical promotions and price adjustments preserving our price premium. Convergence in France is a strong retention, a strong acquisition tool. This supports the performance in both markets, fixed and mobile. 77 of the new convergent customers are new fixed and/or new mobile customers. And as previously commented the churn rate is significantly lower when you look at convergent customers. Turning to Spain in the next slide, page 17, you see this very important acceleration of growth. We are now at 8.8% growth in Q2. This is more than the 8.5% that we had in Q1. And this is driven by service upgrades, growth in the customer base and also growth in wholesale. This revenue growth plus the integration synergies mostly coming from the migration of Orange ADSL customers to Jazztel FTTH network are fueling double-digit growth in EBITDA, with the EBITDA margin reaching now in Spain 27.5%. This is plus 1.6 point year-on-year. We are continuing to follow our value strategy leveraging on our four brands in Spain with less recourse to promotions than competitors. We have during the quarter a launched no-frill convergent offer under the Amena bond to capture growth in the emerging low-end convergent market. This offers price at a €4 premium versus Vodafone and Masmovil, which demonstrates our contribution to price rationality in the Spanish market. Mobile revenue have been growing by 7.5%, driven by a 4.7% growth in the contract base and a 5.9% growth in the mobile ARPU, supported by the service upgrades on the Orange LOVE offers in February and on [Indiscernible] last May. We have also by the way revised our mobile-only tariffs beginning of April and Orange prepaid and SIMO offers in June. The fixed broadband revenue is increasing by 8.3%. This is driven by a 4.4% growth in subscribers and a 3.5% growth in broadband ARPU, fueled by fiber and TV penetration. As you know, Spain is convergent market. And our convergent revenues in Spain are growing by 13% to €533 million. This is driven by a 5.7% growth in the number of convergence offers subscribed and also a 7% growth in the convergent OPCO, which is now reaching in Spain €57.7 per month. We are committed to deploy fiber in Spain, since fiber is really driving our profitability. And we have decided to speed up the fiber rollout to cover close to 14 million households by 2018. This is one year ahead of the initial plan. And as mentioned in the Q1 conference call, Vodafone has halted co-deployment with us, which results in a temporary small CapEx increase for Orange Spain in 2017 assuring our position as number two in the market, a very good investment. In terms of commercial performance in mobile, our 4G user base in 2018 is increasing by 35% year-on-year, reaching 8.7 million customers. We are committed to maintain our 4G commercial leadership reaching 93% of population coverage. And in order to absorb the traffic increase following the decrease in prices of EU roaming, we will this summer increase 4G network coverage and capacity in tourist areas. During the quarter, contract mobile net adds accelerated to a plus 140,000 net adds. This is more than 20% increase compared to Q1. In terms of fiber, we have posted a very solid figure in Q2 with plus 141,000, reaching a total of 1.95 million customers. This is an increase of almost 60% year-on-year, with fiber penetration of 47% of our broadband base. TV is also being increasing rapidly with TV subscribers multiplied by 1.4 to 541,000 supported by the growth in fiber subscribers. And in terms of convergence, we are leading the race. We are the most dynamic operator in Spain. Our broadband base is now 83% convergent. Turning to Poland, we have been launching the LOVE offer in Q1. This is the convergence strategy once again. And this is clearly supporting the fixed broadband and mobile postpaid commercial performance. The B2C convergent customer base has been increasing by 51% year-on-year, with now 43% of our B2C broadband customers on a convergent offer. So, a very rapid increase. The net adds in mobile contract continued to be strong despite less handset subsidies with the postpaid ARPU trend going down by 10%, which is still reflecting the shift to SIM-only and installment offers with discount offered with our convergent packages. We have been investing in very high broadband, now covering 2 million fiber connectable home versus almost doubling year-on-year, and growing our broadband customer base to a total of 2.3 million. As you can see here, revenues were down by 2.2% in Q2. This has notably been negatively impacted by higher comparable base in equipment sales. The efforts in Poland on cost efficiency on the decrease of commercial expenses and a stronger focus on value and optimization of commissions paid is being pursued. And on all these issues, Orange Polska will disclose an update of its strategic plan on September 4th. In Belgium and Luxembourg in the context of increased competition, Orange Belgium performed quite well in the second quarter in terms of postpaid net adds. It was 21,000 net adds compared to 3,000 in the first quarter. And this was achieved despite deliberately lower subsidy budget. And also despite the adverse EU roaming impact, the ARPU performance continued to be driven by the constant increase in data usage, driving customers towards higher-priced data bundles. There is a good performance of the Orange LOVE convergent offer. We have 15,000 net adds on this quarter despite tough competition on this market. And all this is contributing to a solid financial performance both in terms of revenues, plus 3.5%, and adjusted EBITDA, plus 8.4%, even if we have to note, of course, both figures were positively impacted by difference seasonality in MVNO revenue. In Central Europe, we had growth accelerating at more than 7%, driven, as we said, by Romania but not only. In Africa, Middle East, we have been introducing two new segments in Q2 around Côte d'Ivoire and Senegal. So we have Sonatel Group with five countries and Côte d'Ivoire with three countries. The trend is improving in almost all our footprint through a confirmed commercial dynamic, 3.9 million net adds, thanks to our investments in networks, especially rollout of 4G. And as a result, revenues have been growing by 2.7% in Q2. This is a strong improvement compared to previous quarters and driven by the Côte d'Ivoire cluster, plus 6%, the Sonatel cluster, plus 5% -- 5.1%, and also a very good dynamic in Morocco, plus 7.5%, following the recent rebranding. This performance is also due to continued success of our business drivers. We have been talking about them in the past quarters. Mobile data revenue is growing by 33%. Orange Money is still accelerating with 65% growth. We now, for the first time, have more than 10 million active Orange Money customers. And also the B2B segment is growing 9% in H1, confirming this positive trend. As a result, the adjusted EBITDA has been growing by 0.9% also thanks to the efforts to optimize the cost structure. Last, but not least, Enterprise. As expected, the Q2 revenue trend has been better than the Q1 thanks to the improvement of voice and mobile trend. Data clearly continues to be negatively impacted by the termination of some contracts which occurred in the past. Mobile remained under pressure, mostly impacted by the decrease in the European roaming. Despite a good commercial performance, we have plus 39,000 mobile net adds in Q2. And in line with our ambition to grow our IT services, IT and integration, which represents more than 28% of the Enterprise revenues, have been growing by 3.3% in Q2, driven by security, plus 27%, and cloud, plus 15%. H1 EBITDA decreased by 4.9%, but we expect H2 to be better than H1. This is what already we said in the first quarter and we still plan this trend with new cost efficiency projects being launched to compensate for fixed voice and data revenue decrease in France. So, this concludes the operational review. And I will now hand over to Stéphane to come to the 2017 guidance. Stéphane Richard: Well, regarding our full year guidance, of course, no surprised that with this very strong result performance in H1, we confirm very clearly our full year guidance of Group adjusted EBITDA above 2016 on a comparable basis. We will also maintain our net debt to adjusted telecom EBITDA ratio around 2 in the medium term. Regarding the dividend for fiscal year 2017, we will propose, as previously announced, in 2018 AGM a dividend payment of €0.65, and we will pay a €0.25 interim dividend on December 7th, 2017. This has been agreed by the Board yesterday. Regarding our portfolio management policy, we still confirm our selective approach focused on our existing footprint. And I want to just make a last point before taking your questions to tell you that during the fall, as I mentioned earlier, we will offer you a meeting to update you on our Essentials2020 strategic plan with a special focus on CapEx and operating cash flow outlook. We will tell you about the details of this meeting dedicated to you in a few weeks' time. Thank you very much for your attention. And I'm now available with the team to answer your questions.

Thank you, sir. [Operator Instructions] We will now take our first question from Daniel Morris from Barclays. Please go ahead sir, your line is open.

Yes, good morning and thanks for taking my questions. I've got a couple, please. First of all, I wanted to ask about SFR's recent announcement to build an independent nationwide fiber network effectively without any subsidy. I just wondered if you looked at such a similar plan yourself. And I wondered why might they do such a thing that maybe you couldn't. And related to that, what was the likely impact on Orange parallel subsidy -- parallel network? The second question is also around fiber in France. I just wondered if you can update us on the current co-investment levels that you're seeing. I think they were running at about 5% or maybe slightly above. Thanks very much. Stéphane Richard: Okay. Thank you for your question. I will maybe start with providing you a global view and maybe ask Pierre Louette and Fabienne Dulac to -- of course, make any useful complements. Regarding the announcement of SFR about fiber rollouts in France, I would like to remind everyone that what is the status of the situation today. In fact, in France, as you know, the country has been divided into three zones, three areas. The first is dense areas, meaning, the cities. The second is the mid-dense areas, the suburbs and medium-size or small-size cities. And then there are the rural areas. In the dense areas, the fiber rollout is nearly completed, meaning that every operator, including, of course, SFR and starting with Orange, has been able to roll out its own fiber network. That is what we have done. And by the end of next year, we will have 100% of FTTH coverage in dense areas. We are talking about more or less 6 million homes. So this is not -- absolutely not concerned by SFR announcement. Then you have the mid-dense areas. We are talking about more or less 12 million homes. On those 12 million homes, there is a regulatory frame that has been put in place and according to this regulatory frame, Orange is rolling out a very large part of those homes, probably in the range of 80% to 90% of those homes, on an economic business model, which is based on wholesale and retail, the wholesale part being based on co-financing, and we will come back to this. We are perfectly on track to reach our targets of rolling out fiber-to-the-home in this mid dense part of the country, meaning that once again on that area, there is no room for anyone to build fully independent fiber network, or it would be at its own risk, I would say, and certainly not based on the wholesale model. So, then there is the third part, which is the rural areas. We are still talking about between 12 million and 40 million homes. This is a place where, according to the regulatory approach, FTTH should be rolled out within public-private partnerships. And there is today a bench of auctions that are organized everywhere in the country by the local authorities to find an operator in order to conceive, build, and operate those public-private networks. We are today more or less in the middle of this process, meaning that you have a number of those public networks organized by local authorities that have been attributed and that are going to be built. We are in the beginning of this process, but a lot of them de facto has been attributed. And then you still have probably 50% of this area that should be granted to an operator in the coming month. So, SFR announcement is mainly focusing on that rural part of the country, saying that they might intend to build their own network on those areas where they will have, I would say, in front of them or close to them those public networks. Regarding Orange, our strategy is very clear and very simple. First, we want to roll out FTTH 100% in dense areas. This will be completed by the end of next year. Second, we will roll out between 80% and 90% of FTTH in the mid-dense areas based on the wholesale and retail business model. And third, we think that for the rural areas, we should have a very pragmatic approach. We will be the partners of local authorities in a number of cases and number of situations. It is already the case in big regions like Brittany. And we are still a candidate to be the operator of those public-private, let's say, networks in a number of other areas. And then in the situations where we would not be the operator of those public networks, we will consider the situation case-by-case. In some cases, we will be a customer -- a wholesale customer of public networks. In other cases, we will maybe do -- if we can do something with another operator and that's it. So, we are not in favor of a sort of global nationwide policy regarding FTTH. We want to cover the maximum of homes as soon as possible. And we think that it is by playing, in fact, what has been put in place in the regulatory frame with all the stakeholders around the table, the regulator, the state, the local authorities and all the operators that we will find the best possible solution. This is my view. Now, maybe I'll ask Pierre to provide some info regarding maybe co-financing level in France and anything else that he might like to add.

Maybe just two words to follow-up on your comments on the framework and also SFR's initiative. We look at what we do. We deliver. We decided to invest, we have invested. We are fully in our line, on our tracks. We have an industrial machine, which Fabienne leads, which is delivering at a super high level. Now, we're able to produce more than 2 million plugs per year. And now if I look at the other track, I see people who are lagging behind, who have not even started the race, who said they were going to race, they were going to do something, they hadn't even done it, if you look at the less dense areas. So, I leave it up to your appreciation to appraise the value of new promises made by someone who has not even started delivering on the previous promises. It's your call. It's really a show-me-the-money issue. They haven't shown the money until now. We have. Stéphane Richard: Okay. That's quite clear. And what about Fabienne? Maybe Fabienne wants to add something.

Yes. On the co-financing level in France, we recalled competitors' acceleration in fiber as expected and it increased co-financing revenues. And we are very satisfied with the level of co-financing. It's very important to ensure the fiber profitability, because the business model on the fiber will be both retail and wholesale. It's what we know and what we want to prove and to improve. So, it's not a problem. And it's really important for two another point; we need to have a better dynamic in the fiber market and create collective for customer. It's very important. So this co-financing is a good news for the wholesale. It's a good news for the retail. And I am really confident that the first move -- advantage we have since a long time now is how -- the know-how regarding commercialization, deployment, installation will be a very strong asset for the future. And maybe another point, we can hope and maybe it's good news that the co-financing will push our competitors to be -- have more virtuous behavior in the future in front of promotional and a very aggressive strategy. Stéphane Richard: Okay. Thanks. Next, third question?

Can I ask a very brief follow-up on the -- can you give an absolute number at all in terms of 5%, 10%, 15% co-financing rate at the moment? Thank you.

This is Ramon. It -- this changes very much from quarter-to-quarter, from semester-to-semester, because there was an important acceleration in the first half of 2017 in terms of co-financing because of some tax incentives, which provided some incentive to accelerate. It accelerated, in fact, by close to 70% compared to the first half of 2016. So, doesn't make so much sense to give you an absolute figure, because, in fact, it evolves over time. It was more important in the first half, for instance, than it should be in the second half. But the trend is clear. It's absolutely what Fabienne was just saying, which is that there is willingness, dedication of our competitors to do more, because they all have understood that fiber was the key. But as Stéphane and Pierre were saying, the show-me-the-money story is from time-to-time a bit different from what you hear. So, we are moving ahead. Co-financing is coming, which is good news. But in terms of percentage, it evolves over time.

Very helpful. Many thanks. Stéphane Richard: Okay. Thank you. Next question?

Thank you. We will now take our next question from Nicolas Cote-Colisson from HSBC. Please go ahead, your line is open. Nicolas Cote-Colisson: Thank you. Hello, two questions, please. First, a follow-up on regulation. I understand that you have met with government at several occasions in July. I was wondering what was your plan to the reconcile the government new ambitions on the fiber or even mobile with your commercial objectives -- sorry, your financial objectives. Do you think you could get some tax relief or better terms for license renewal in France? And my second question is on Spain. I was wondering what was the reason underlying the lower broadband net adds in Spain. We're seeing the same thing in Telefonica today. Don't you think there's a price-rise fatigue in the market? Or do you think the more-for-more strategy still works? Stéphane Richard: Okay. Regarding the first question, I confirm that Pierre and myself have begun a process of meetings with the new government around what has been publicly announced, which is to provide a good broadband, which doesn't mean necessarily fiber-to-the-home, to 100% of French population by 2020. This is for the fixed side and then there is also a discussion starting on the mobile side. On the fixed side, we think that if we keep on what has been implemented today regarding FTTH rollout, as we detailed this a few minutes ago, we should be able to reach the target which has been set by the President. Maybe there is still some need for a slight acceleration in this, but no big change in the investments -- in CapEx projections that we have regarding the fixed side in France. Regarding the mobile issue, it is about covering some parts of the country where there is a poor coverage, but also not very highly dense areas. So, clearly, if there is any additional investment to make to improve the coverage of this part of the country, we will ask and obtain some financial compensations from the government. It might be around tax issues. It might be also around the duration of spectrum licenses, which is also something that we could talk about. So, we are just starting those discussions, but the basis of this discussion is additional investment versus financial compensation. Regarding Spain, I'll ask Laurent Paillassot, who is online with us, to take your question.

Hi to all of you. Regarding Spain, what's really happening is, it's true that we were the fourth operator, mass mobile on the market. We have stronger competition. And there's been quite a lot promotions, especially in the last Q2. The good news is that we do see the market growing faster than we were expecting. But as Orange is concerned in Spain, our focus is on value generation. So, basically, we are focusing on FTTH customer base. And in fact, we've been number one in term of net adds in Q2. So basically, we don't think it is useful to enter in very strong promotions as we speak. And we maintain a strong focus on FTTH. We've had 150 net adds in Q2. So, we're accelerating our FTTH penetration. So the more-for-more strategy we're maintaining and it's worked and you do see that in the results that we have. As Ramon mentioned, I mean, our growth is coming from three strong engines. We're growing in volume, we're growing in ARPU, and we'll also have the benefits of the wholesale activity. So, more-for-more will remain the name of the game for us. Stéphane Richard: Thanks. Next question?

Our next question comes from Dimitri Kallianiotis from Redburn. Please go ahead.

Good morning. Just a couple of questions on the comments you made regarding content. And I just wanted to ask you if you are thinking about really changing the strategy that you have at the moment. Or in terms of are you going to produce sort of more of your own content? Or we're still talking just about distribution? I want to ask you -- you mentioned about strengthening the partnership with Canal. And I want to ask if you could give us a bit of an update with the offer you've launched, the Famille by Canal on fiber, if you could give us any subscriber numbers, if you are pleased with the uptick there. And regarding next year, we've got probably the new beat for the domestic football in France, and I just wanted to ask you if you were planning to participate maybe co-invest with -- co-bid with Canal? Thank you. Stéphane Richard: Okay. So, just a few highlights on our content strategy and then I'll ask maybe Fabienne to provide you with an update on some figures. Basically, we have not changed our approach and strategy regarding contents, meaning that, first, we think that content is a key issue for us for our business model and is a key tool to upsell and to improve steadily our fixed broadband ARPU. And this is working, meaning that every euro that we spend in buying contents produces additional revenues and additional EBITDA. So, -- and this is clearly proven by the set of results that we have today. So, we are increasing our content expenses, but in the same time, we have additional revenues and -- with very nice growth in that part and those revenues are producing additional EBITDA. Number two; we don't have a strategy based on vertical integration, meaning that Orange should become a producer of content. We are basically distributors of contents, which does not exclude that we have some assets in production and addition. We have two assets, main assets. The first is our film production studio, Orange Studio, who is now working for more than 10 years. And the last film that we have coproduced is Valerian, the last film made by Luc Besson. And we will keep on putting the necessary resources in this studio in order to participate through the film creation in France and also produce some movies that we can then broadcast in OCS, our Pay TV channel, and also put in our video-on-demand catalog. The second asset is OCS, the Pay TV channel. As you know, we have renewed our exclusive contracts with HBO. And OCS is still a very attractive product with -- very successful with French public. We have 2.6 million subscribers in OCS and OCS is now -- has now reached the breakeven point in its P&L. For the rest, we rely on partnerships, partnerships with a few key partners, starting with Canal, Canal+. As a matter of fact, we have strengthened our relationship based still on the distribution role for Orange with Canal+ through a recent agreement that I announced a few days ago. The purpose of this agreement is to enable Orange to offer to its customers in exclusive and very attractive pricing conditions. The main program of Canal, Canal Essential at a very interesting price and we will be the only one to do this in the French market. This is basically what we have negotiated with Canal. Before handing over to Fabienne, just a word on sports rights. Our plan is not to buy massive sports rights in order to create a new sports channel. If I may say so, we are not going to replay the game of 2006 or follow the example of maybe BT in the U.K. The situation is totally different in this country and this is not our plan. This being said, of course, we will pay a lot of attention to what's going on in football auction about the agenda first, because no one knows exactly when this will take place and about the way the different players will tackle this event. Our plan, once again, is not to be a candidate in this auction, but, of course, we will try to see where is our interest and our customers' interest in order to ensure that we will have the best possible access at the best possible price to football contents after 2020. And before 2020, we have a strong agreement now with Canal and beIN. So the problem or the situation will have to be considered for the post-2020 period of time. And this is the way we are seeing the situation. Now maybe, Fabienne, about the commercial results of Canal.

Yes. Maybe I come back on the second question. As explained by Stéphane, our partnership with Canal is very important, because it sustains our content strategy to have the largest and the most attractive catalog of content and to remain a smart provider and a major player. In this agreement, we have two points. Renewal of existing Canal+ distribution until by 2020 and a new proposition, very important for us. A new model of Canal+ essential, direct distribution by Orange for our fiber customers. This model is hopeful to have our fiber customers to benefit from Canal+, as explained by Stéphane, with very -- and an exceptional market conditions. So, it's very important for us. In this case, another point, Orange will be responsible for the commercialization, for the customer relationship and the billing. All this strategy has one finality. It's to associate the best of entertainment and the best of the network and sustain our strategy on the fiber. Concerning Famille by Canal, we are really satisfied by our offer, which is on line with our expectation. This offer is another point to sustain our strategy and make it possible for our fiber customers to benefit from both the power of the best fiber and the best entertainment. And we work with Canal over the time to enrich this offer. We included new TV channel this last month. So, it's a very good strategy. Stéphane Richard: Thanks, Fabienne. Maybe last word by Ramon on the business model of content.

Yes, maybe -- thank you, Stéphane. Just to add to that, in fact, when we look at how we can attract, how we can retain customers, how we can support the growth in revenues, how we can support growth in EBITDA, basically, we have three type of levers on which we are working. The first one is acquisition costs. The second is retention costs. And you know that we have to manage subsidies more or less, et cetera. So, we act on all these levers and various content. And it's when you take these three levers in conjunction that you have the best mix in order to support your growth in revenues and EBITDA. And what we have been announcing with a partnership with Canal, with HBO, et cetera, always is fueling an approach, which is supporting the growth and the acceleration in growth that we are seeing now. It is true in France. It's also very true in Spain, where we have seen that sports; for instance, in Spain has been part of the fantastic growth in revenues and EBITDA, including through TV offers. So, this is a consistent approach and it is very much supporting the improvement in the performance of the Group. Stéphane Richard: Thanks. Next question.

Thank you. Our next question comes from Alexandre Roncier from Exane. Please go ahead.

Hi, thanks for taking my question. I have three, if I may. First question on France with the return to growth and maybe some phasing for H2. I was wondering if you were willing to be more aggressive to sustain your commercial performance. And this question also explains to Spain where we have yet -- I think we've seen some real push from the enlarged mass mobile. Secondly, still on France, what are the opportunities for Orange following the regulator's push to propose €100 entry-level offer for broadband for small and medium enterprise? Thank you. Stéphane Richard: Fabienne, on France growth and marketing strategy.

Yes. So, as you said, the market is still under pressure with a lot of promotion. And this Q2 was maybe exceptional, because we have a level of discount both mobile and fixed very aggressive, with limited data plan, with generalization of the rural [ph] secondary mobile line, with an aggressivity on the broadband. So in this context, we think that the H2 will be in the same trend, very aggressive. And we expect for Orange the stabilization of the revenue for H2 even if it's very aggressive and very under pressure, because we are confident in the strategy we have, marketing strategy and commercial strategy we have. This Q2, we succeed to reach volume and value and to prove we can win on both sides. We have the capacity to maintain volume dynamic. And we have the capacity to increase household ARPU. So, I think the H2 will be in the same trend, driven by the household strategy we have sustained by quadruple play by the content. We talked just about it a few minutes earlier. And as we observe transfer from the mobile to the broadband, very consistent with the strategy we have, since long time, I'm really confident in the future and in the H2. And we can confirm the stabilization. Stéphane Richard: Thank you, Fabienne. Then, I will ask Laurent about the broadband performance in Spain with mass mobile in the landscape.

Well, again, I think the -- our answer on Orange is as we have this unique asset of having three brands on the convergent, we have Orange for the high-end, we have Jazztel on [Indiscernible], and basically, on the low cost, we introduced Amena as a convergent offer. So basically, this allows us to be present and to react very smoothly to whatever kind of promotion without changing the focus that we have on value creation. So, I think we have a unique asset with these three brands, which are very strong brands on the market to be able to compete without getting into strong promotions and injuring the pace of growth. Stéphane Richard: Thank you, Laurent. And Thierry on the B2B SME segment in France.

So, when it comes to the asset conclusion, it's about introducing a new wholesale B2B player. And it's about providing guaranteed lead-time to repair, about 10 hours. What we think that it will not impact our B2B markets before, let's say, probably beginning 2018 or 2019. So, no impact for 2017. Of course, it will increase competition. What we should know is that it's not only a first B2B market of access; it's as well a market of services. And what explains our successes within suburbs and Swiss market in France is that we combine both access and services. So, we are very much prepared for facing these new competitors, let's say, end of 2018, beginning of 2019. Stéphane Richard: Thanks. Next question?

Thank you. Our next question comes from Jakob Bluestone from Credit Suisse. Please go ahead.

Good morning. I've got few questions. Firstly, on French fixed line, you mentioned earlier that you've seen an acceleration in co-financing during the first half of the year. But if I look at your wholesale revenues, they actually slowed in French fixed. If you maybe just give us a little bit more color on why that growth slowed? Then secondly, on the rural areas that you mentioned earlier, when you sort of model out what the impact is from this partnership or sort of becoming a wholesale around some of the independent fiber networks, you think this will be dilutive to your EBITDA? And if so, by how much? And then finally, I think there was some press commentary during the quarter that you looked at a metering company in Germany, I think. Can you maybe just comment on what your sort of appetite is for M&A in non-telco areas aside from content, which you obviously talked about already? Thank you. Stéphane Richard: Okay. Regarding maybe the wholesale -- French fixed wholesale revenue France, Pierre?

So, regarding the wholesale, I didn't completely understand what you were saying. We have an increase actually in our wholesale revenues, which is relatively strong with regard to the same period last year. It's in the area of 2.5% above what we did in the first semester last year. So, this is an increase. Actually, there are many contributions to that. One of the first ones as you mentioned is that the co-financing system which has been established in France and which is also recommended by the European framework now is working and is delivering. So, we have a lot of competitors, especially Iliad, who co-financed very much. It creates revenues on the wholesale side. But above all, we have new territories that I think we described and mentioned a year ago in the same events, new territories, which have become real. I mean, we have an increase in our new kinds of clients, new commercial contracts with the railway and transportation system in France, SNCF, Eurostar, in the cloud area also, all of those new kinds of clients, new territories, they create revenues, which are able to make up to really compensate the decrease, which is the program to decrease in the roaming revenues. So, we have a very, very strong commercial performance. And even on the local network side, Stéphane mentioned 10 minutes ago the areas in France in which the territories are in charge of creating the networks. Even on this side also, we have new revenues. So, really, Wi-Fi in the trains, Eurostar, a deal with Deutsche Bahn. And new territories make up for the decrease in roaming, and it's a very strong performance. Stéphane Richard: Thanks. Regarding the M&A, may I maybe summarize and remind everyone of what is our approach now regarding M&A. Our approach is selective, focused on existing geographies, meaning that we have no plan to expand geographically today. We want to seek for opportunities if there are to play in market consolidation in the markets where we are and if there are any possibility. It is obviously not anymore the case in France. But we are looking to the countries where we are in Africa and the Middle East and the rest of Europe with both in-market consolidation and convergence when it is necessary, even though I think the largest part of this has been done in those countries. And regarding non-telecom area, we have two targets or two development priorities. The first is mobile service -- mobile financial services. And the second is Internet of Things. Our developments will be mainly achieved through organic growth and innovation. But we cannot exclude from time-to-time if it is necessary and if there are some solid opportunities to create value to build partnerships or even to do some M&A if, once again, in those two areas, it makes sense and it is a way for us to reach our targets. So, there is no -- nothing else to say about M&A. There is no other plan than what I mentioned. May I ask one last question?

Thank you, sir. So, our last question for today comes from Andrew Lee from Goldman Sachs. Please go ahead.

Okay. Thanks for taking my questions. Morning everyone. Just a question on the sustainability of the French topline growth, just a follow-up on a question earlier, and then a question on the border enterprise business. So, on the French topline growth, there's a lot made into the quarter as has been in previous quarters with even harsher promotional activity. But I think what you're saying is that it wasn't worse than the last couple of quarters. Could you give your take on that? And then just if you could run through what you see the big risks you see to French topline growth going through 2017 and into 2018, it sounds from a previous comment like you're saying that French revenues are stable even if you get very aggressive promotional competition. So base case scenario for the French topline should be small growth. And then on the Enterprise side, are we seeing any structural pressures coming through here? You mentioned you need to step up cost cutting in H2. Is that because you are seeing more topline pressures? Any help from that would be great. Thank you. Stéphane Richard: Fabienne, on the French market, Thierry on the Enterprise side.

So, as I said just before, we are confident in this system about topline growth. But in one way, the total revenue continued to stabilize. We have a good news. The improvement of mobile services trend in Q2, as you can say, driven by the slowdown of the national roaming revenue decrease and the end of the effect of the first moving regulatory change in Europe. But the markets -- the mobile market is still under pressure with a lot of promotion, very aggressive. So, it's -- I think we just work to maintain and to stabilize. It's a good thing in this really aggressive market. We have a better and more better news on the broadband, because you can see the revenues on the broadband is well-oriented, sustained by the strategy we drive -- sustained by our strategy in the fiber, in the convergence and in the content, with a very well-oriented ARPU and we will push you the report in this way. So, I think the market will be and the dynamic of the market will be a key, very important for the future. Stéphane Richard: Thanks. And last, Thierry?

As mentioned by Ramon during the first part of the presentation, we are still expecting strong pressure on voice and data revenue evolution, particularly in France for H2. That's structural move you all understand. And we have been working on different programs; action plans for guaranteeing that profitability, also competitiveness will still be there whatever is the evolution of the revenues. And so it's about automatization -- IT automatization, simplification of our organization, both presales, sales and delivery and after sales. And it's about still continuing to develop the growth opportunities developing the, what we call, the data journey within our footprint, allowing us to amortize -- better amortize the SG&A cost when it comes to reported revenues. Stéphane Richard: All right. So, we come to the end of this meeting. Thank you everyone to attend. And thank you for your interest in Orange. Have a nice day.