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France Telecom to cut calling costs in exchange for subscription rate hike

France Telecom chief executive Thierry Breton has promised to cut calling costs by at least 26 pct between now and 2008, while at the same time raising the base subscription rate by 23 pct over the same period.

In an interview with French daily Le Parisien, Breton said the subscription rate is the lowest in Europe, and claimed that subscription revenues do not cover the costs of operating the group's network.

'In summary, phone bills are going to decline for the French from 2005 if this proposal is accepted,' Breton said. The report calculated that the subscription hike will generate an additional 1.5 bln eur of revenue over the period.

Le Parisien said Industry Minister Patrick Devedjian will approve the new pricing proposals in the coming days.

Breton said the group will also reduce the start-up costs for local-loop unbundling for rival operators who use France Telecom's network by 30 pct.

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