The French government is to inject more than €9bn (£5.73bn) to bail out the debt-ridden France Telecom.
The rescue package is the first step in a €15bn (£9.6bn) programme to nurse the company, struggling under a debt of €70bn (£45bn), back to health.
According to Associated Press reports, the government is considering selling off part of its 55 per cent share in France Telecom.
A spokesman for the struggling telco said that the state-run company plans significant cuts in capital investment. This could delay the roll-out of some new services by the company's mobile unit, Orange.
The France Telecom board has also voted to remove Jean-Louis Vinciguerra as chief financial officer and replace him with Michel Combes, former head of satellite carrier GlobeCast.
The company did not announce the change, but included Combes as the financial officer on a list of the steering committee. Vinciguerra's name was absent. It is expected to formally announce the plan at a news conference today.
France Telecom announced last week that it plans to reduce its employee ranks by 20,000 by 2006, in part through an early retirement plan.
About 108,000 of France Telecom's 140,000 employees are civil servants, which would make any massive job cuts difficult because civil service jobs are protected by law.
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