Shares in the mobile phone operator Orange, the France Telecom offshoot, made a dismal start to trading in Paris and London. The shares ended at €9.40 in Paris, just below the €9.50 price they were offered to retail investors and a full 5 per cent below the €10 at which they were offered to institutions. In London they closed at 603.5p. Institutions took up about three-quarters of the shares and retail investors the remainder.

Mark James at Nomura, one of the few analysts free to comment because his bank was not participating in the flotation, said that although it was dangerous to extrapolate after only one day's trading, the valuation of Orange looked attractive at these prices. Nomura has a fair valuation for Orange of €55 billion, some 15 per cent more than its closing price yesterday.

The three telecom companies, which have also announced plans to float their mobile offshoots, all saw their share prices fall. Deutsche Telekom closed down at €30.95, a two-year low, while KPN fell to €13.85 and British Telecommunications fell to 616.5p.

Yesterday was also France Telecom's day to announce annual operating revenues for 2000, which rose 23.7 per cent. But its shares fell 6.3 per cent to €78.70, their first time below €80 since September 1999.

Wanadoo, the Internet offshoot of France Telecom, came under pressure after reporting turnover up 37 per cent to 1.1 billion for 2000. The shares fell 3.7 per cent to €9.

Pressure on France Telecom spread to other European telecoms, with Sonera off at 16.35, a new two-year low. Merrill Lynch cut Sonera's rating from "buy" to "accumulate" a day after its results for 2000, which were in line with expectations.

German telecom operator MobilCom, in which France Telecom holds a 28.5 per cent stake, fell to a new low after reporting an operating loss in 2000 following a profit in 1999. MobilCom last year won a German UMTS mobile phone licence. Last week it announced it was closing a third of its Comtech computer retailing branches. Its share price fell to €28.16.