France Telecom shares have fallen after the French government moved to reduce its substantial stake in the business.
The state will retain its stake for some time
Ministers are selling at least 5% of the state's holding, raising about 2.7bn euros (£1.8bn; $3.6bn).
After the share sale, which will be used to reduce national debt, the state will still own between 25% and 27%.
France is one of several European countries to retain financial interests in national telecoms firms, to the dismay of EU competition regulators.
Before coming to power, President Nicolas Sarkozy pledged to cut state-owned investments in leading firms in an effort to curb debt, as a prelude to tax cuts.
French economy minister Christine Lagarde announced the share sale, which will dilute the government's existing 32.41% holding.
"The profit from the transfer of these stocks and shares will be fully allocated to reducing the debt of the state and public services," she said, adding that the firm would retain a substantial stake for the time being.
France's public debt totalled more than 1.1 trillion euros at the end of 2006.
Shares in France Telecom, which owns the Orange mobile phone business, were down 2.5% at 20.46 euros in morning trading in Paris.
Its profits fell last year despite a strong performance from its mobile phone business and foreign operations.