RISKS RELATING TO THE FINANCIAL STRUCTURE AND PROFILE OF THE

GROUP

4.3.1 The significant indebtedness of the Group may affect its ability to finance its operations and its overall financial position.

The Group currently has a substantial amount of debt. As of December 31, 2014, the total amount of financial liabilities of the Group amounted to €13.6 billion, after the May 2014 financing and refinancing transactions. See Section 10.2.2 “Financial liabilities” of this Registration Document. The Group’s significant indebtedness entails negative consequences, including:

 requiring the Group to devote a significant portion of its cash flow deriving from its operations to the repayment of its debt, thus reducing the availability of the Group’s cash flows for financing internal growth using working capital and investments and for other general business requirements;

 increasing the vulnerability of the Group to a business slowdown or to economic or industrial circumstances;

 limiting the ability of the Group to compete;

 limiting the Group’s flexibility in planning for or reacting to changes in its business and its sector;

 limiting the ability of the Group to make investments in its growth, especially those aimed at modernizing its network; and

 in particular, limiting the Group’s ability to borrow additional funds in the future and to increase the costs of such additional financing, especially due to restrictive clauses in our current debt agreements.

These risks could have a material adverse effect on the ability of the Group to repay its debts, as well as on its business, results of operations and financial position.

4.3.2 Despite the high level of indebtedness of the Group, the Group will be able to take on a significant amount of additional debt, which could exacerbate the risks associated with the Group’s substantial debt.

The Group’s debt agreements restrict but do not prohibit the Group from taking on additional debt. The Group may refinance its debt and it can increase its consolidated debt within the context of its activities, particularly in order to finance acquisitions, to finance early repayment penalties, if any, within the framework of refinancing existing debt, to finance distributions to its shareholders, or with the aim of financing the Group’s business in general. If the Group takes on additional debt over and above the Group’s current consolidated debt, the pertinent risks to which the Group is currently exposed will intensify.

4.3.3 As a holding company, the Company depends on the ability of its operating subsidiaries to generate profits and ensure the servicing of its debts. Any decline in their profits could have a material adverse effect on the Group’s financial flexibility.

The Company is a holding company that does business indirectly through operating subsidiaries (see Section 7.1 “Simplified organizational chart of the Group” of this Registration Document). The Group’s operating subsidiaries hold its assets, and nearly all of the profits and cash flows of the Group are allocated to them. If the profits of these operating subsidiaries happened to fall, the profits and cash flows of the Group would be affected and the subsidiaries involved may not be able to meet their obligations, particularly their debts, or to pay dividends to the Company. The cash flows of the Company mainly derive from the receipt of dividends and interest, and repayment by its subsidiaries of intra-group loans. The ability of the operating subsidiaries of the Group to make these payments depends on economic and commercial considerations, as well as on any legal constraints that may be applicable, as the case may be. In particular, the distribution of dividends by the Group is subject to compliance with certain restrictions, including a financial ratio. Any decline in profits or an impossibility or inability on the part of the Group’s subsidiaries to make payments to the other subsidiaries of the Group could have a material adverse effect on the Group’s ability to ensure the servicing of their debts and to meet its other obligations, which could have a material adverse effect on the business, results of operations and financial position of the Group.

4.3.4 The Group may not be able to generate sufficient cash flows to meet its obligations in terms of servicing its debt.

The ability of the Group to ensure the servicing of its debt and to finance its operations in progress will depend on its ability to generate cash flows. The ability of the Group to generate cash flows and finance its expenses of investment, operations in progress, and obligations in terms of servicing its debt depends on numerous factors, including:

• its future operating performance;

• its ability to maintain the level of technical capacity required on its networks and the subscriber equipment and other pertinent equipment connected to the Group’s networks; • its ability to successfully introduce new products and services;

• its ability to reduce the churn rate;

• the general economic conditions and other circumstances affecting consumer spending; • competition;

• sufficient distributable reserves, in accordance with applicable law; • the outcome of certain disputes in which it is involved; and

• legal, tax and regulatory developments affecting the Group’s business.

Some of these factors are beyond the control of the Group. If the Group is not able to generate sufficient cash flows it might not be able to repay its debt, to increase its business, to respond to competitive challenges, or to finance its other cash and capital requirements, including investment expenditures. If the Group is not able to meet its obligations in terms of debt servicing, it might have to sell off assets, attempt to restructure or refinance its existing debt or seek additional financing in the form of debt or equity. The Group may not be able to do so, or to do so in a satisfactory manner. 4.3.5 Restrictive clauses and the pertinent covenants relating to the debt securities of the

Group could limit its ability to pursue its activities and any breach by the Group could constitute default and have a material adverse effect on the financial position, results of operations and the Group’s ability to continue as a going concern.

Debt securities issued by the Group contain restrictive clauses and covenants that, among other things, limit the ability of the Group to:

 contract or guarantee any additional debt, subject to a Consolidated Net Debt Leverage Ratio (the ratio is 4.0/1.0 for total debt and 3.25/1.0 for senior secured debt) (see the definition in Section 10.2.2 “Financial liabilities” of this Registration Document);

 make investments (including a stake in joint ventures) or other payments subject to restrictions (including dividends - see Section 20.6 “Dividend policy” of this Registration Document for a description of the scope of this restriction and its exceptions);

 dispose of assets other than in the normal course of business, and of equity securities of subsidiaries;

 enter into certain transactions with its affiliates;  carry out merger or consolidation transactions;

 carry out an early repurchase or redemption of equity securities or of subordinated debt, or issue shares in subsidiaries;

 enter into agreements limiting the ability of its subsidiaries to pay it dividends or repay intragroup loans and advances; and

The restrictions referred to above could affect the ability of the Group to do its business and could limit its ability to react according to market conditions, or even to take advantage of potential commercial opportunities that may arise. For example, these restrictions could affect the ability of the Group to finance its business, to make strategic acquisitions, investments or alliances, and to restructure its organization or finance its capital requirements. Moreover, the ability of the Group to comply with these restrictive clauses can be affected by events beyond its control, such as economic conditions and the circumstances in finance and the industry. A breach by the Group of any one of its commitments or restrictions could lead to default under the terms of one or more of its debt securities and, if not remedied or waived, could result in making the loan immediately payable and thus ancillary defaults under other debt agreements. This could lead to execution on security interests held by creditors and/or the bankruptcy or liquidation of the Group.

4.3.6 Negative changes in the Group’s rating could have a material adverse impact on its financial position.

A rating decline could have an adverse impact on the ability of the Group to obtain financing from financial institutions and to retain the confidence of investors and banks, and could increase the cost of financing of the Group by increasing the interest rates at which the Group could be refinanced in the future or the interest rates at which the Group is able to refinance its existing debt or take on new debt.