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By Leila Abboud and Gwénaëlle Barzic
PARIS, March 17 (Reuters) - France's Orange willplough 15 billion euros ($15.9 billion) into upgrading networksuntil 2018 to differentiate itself from rivals in a price war inits domestic market.
Orange, Europe's fifth-largest telecom operator by marketvalue, also said that it would take until 2018 for its sales andcore operating profit to exceed 2014 levels.
The investment push, much of which will go into fibrebroadband in France, follows similar moves by Deutsche Telekom and Britain's Vodafone, which leads the packwith its 19 billion pound ($28.1 billion), two-year investmentplan dubbed Project Spring.
"We want to clearly set ourselves apart from others byoffering customers better connectivity," said Chief ExecutiveStephane Richard as he unveiled a 2020 strategy plan.
In France, Orange is still coping with the fall-out from theentry of low-cost player Iliad into the mobile market in2012, which sent prices down by more than a third and leftrivals Numericable-SFR and Bouygues Telecom scrambling to revise their own offers.
To help it attract customers who are willing to pay more,Orange plans to triple its investment in fibre broadband by 2020to connect 12 million homes by 2018 and 20 million by 2022. Orange is aiming to triple average data speeds on mobile andfixed lines by the end of 2018.
CEO Richard said he thought the low point for group saleswould come next year, while earnings before interest, tax,depreciation, and amortisation (EBITDA) would bottom out thisyear.
"Our revenues have been falling for five years. We've beenthrough a major re-set in France and the impact is still beingfelt, although most of our customers have passed over to thelower prices," he said.
Orange pledged to pay a dividend of at least 0.60 euros pershare from 2015 to 2018, unchanged from 2014 levels, adding thatthe payout could increase if operating profit was better thanexpected.
Orange's dividend yield is 3.9 percent compared with 4.1percent for the European stock index overall, whileTelefonica and Vodafone both offer 5.5 percent yields.
Deutsche Telekom's dividend yield stands at 2.9 percent butit has said its dividend will rise in the coming years.
Orange will also keep up its cost cutting with a further 3billion euros in gross savings targeted through 2018, on parwith an earlier plan that was lauded by investors.($1 = 0.9454 euros)($1 = 0.6763 pounds) (Reporting by Leila Abboud and Gwenaelle Barzic; Editing byAstrid Wendlandt and Keith Weir)
