In confirming its 2007 organic cash flow target of 7.5 billion euros and setting the same level for 2008, France Telecom executives also point out how hard it is for large incumbent service providers to achieve organic growth inside their present service territories, without expanding out of region.
France Telecom says it will achieve organic cash flow at this level as long as it also hits the same operating margin and maintains investment expenditure at about 13 percent of revenues and maintains the same 2007 dividend distribution rate at between 40 and 45 percent of organic cash flow.
Growth will occur "beyond 2008 and over the medium term," France Telecom executives say.
But growth might not be a problem only the largest incumbents have. SureWest Communications has acquired an out-of-market broadband provider, Everest Broadband, in Kansas City, marking SureWest's first-ever move outside its metro market, aside from the competitive local exchange carrier operations SureWest conducts in the broader Sacramento market, where it competes with at&t.
Growth, despite a management team's best efforts, seems now to be a matter of expanding out of territory. The corollary might be that internal, organic growth is stalled. Presumably, internal new services initiatives will have time to catch on while most companies look to acquisitions to fuel near-term growth.
