As a yardstick of how French business culture has changed, a recent issue of the business magazine L'Expansion took some beating. The cover showed the lean, smiling face of Michel Bon, the France Telecom chairman, captioned: "France Telecom - the champion of wealth creation".

Despite a self-deprecating and amiable manner, Mr Bon (56), has started to remodel the monolithic state enterprise. An alliance with Deutsche Telekom may have broken down earlier this year, but his efforts are bearing some fruit.

France Telecom's newly ambitious spirit emerged clearly last week when it reached a deal with NTL, the third largest cable company in Britian, and the new owner of Cablelink. It has become NTL's backer in an effort to become the dominant British cable operator by buying the network of Cable & Wireless Communications.

Mr Bon adds that France Telecom is still keen to buy One-2-One, the mobile telecoms company jointly owned by Cable & Wireless and Media One of the US, at the right price. If that happened, France Telecom could suddenly emerge as one of British Telecom's main rivals.

In nearly four years at the helm of France Telecom, the energetic and teetotal Mr Bon has steered the company through a testing period. The company has been partially privatised - the French state still holds 62 per cent of its shares, while EU telecoms markets have been liberalised.

Though there have been rumbles of discontent, these fundamental changes have created surprisingly little unrest among the company's 169,000 workforce. Although more than 80 per cent are French civil servants who cannot be dismissed, even more - 92 per cent - are now shareholders.

But Mr Bon's spell at France Telecom has not been without setbacks. Although the group may have become nimbler and more commercial than in the past, it faces aggressive competition in global telecoms. Analysts have still to be convinced that the company can make a success of Global One, an entity owned jointly with Germany's Deutsche Telekom and Sprint of the US, that provides "seamless" services to multinational companies.

This year also saw the most public setback to Mr Bon's ambitions, when France Telecom's alliance with Deutsche Telekom broke down in a humiliating fashion. Mr Ron Sommer, Mr Bon's counterpart at Deutsche Telekom, started talking to Telecom Italia about a merger without telling him. Some analysts drew the conclusion that Mr Bon was too trusting for such a cut and thrust world.

Is there a way in which the France Telecom chairman is simply too nice? After all, with domestic competition heating up, life is likely to get tougher for the company. "I don't know if I am too nice," he says. "I don't feel ashamed of being too nice. As for Ron Sommer, it is difficult to be in such a partnership without confidence. To be frank, I think Ron Sommer changed his mind rather recently. Before that I think he was a faithful partner."

Mr Bon's unusually varied career path has equipped him well for his current post, in which he must steer a careful course between commerce and politics. A product of the elite Ecole Nationale d'Administration, the training ground for top civil servants, he has been a banker and has headed the French public employment agency.

There was even a time in the early 1990s when it looked like he might become a European Commissioner. "I was not the top of the list. I was a kind of outsider," he says, adding that he would have been interested "because I am a very strong believer in Europe".

Most significantly, he spent seven years in senior posts with Carrefour, the well-known French retailer - the last two as chairman. There he became acquainted with the sort of competitive industrial environment which Europe's once-stuffy monopoly telecoms operators are now seeing.

Indeed, Mr Bon gained experience of capitalism's rough edges directly when he resigned in September 1992, when Carrefour's net profits fell sharply. The fall was caused by problems in integrating the Euromarche chain of supermarkets acquired the previous year. That appears not to have endeared him to some of the company's shareholders.

"I was fired," says Mr Bon, with disarming but characteristic candour. "I was fired by the shareholders because the shareholders were also the founders. For them, it was difficult to see that the company was going up without them and without problems. They felt like I was stealing their baby."

Mr Bon cites his time at Carrefour as an example of his willingness to be tough in firing divisional managers. "I am not especially proud of it," he remarks.

Even if he wanted to, it would be hard for Mr Bon to start wielding the axe at France Telecom. "The point is that we are largely employing civil servants and you cannot fire them. I would much prefer to have reduced staff by more than we did, but it is just not possible," he says. He says he has tried to turn the situation to his advantage by pointing out to employees that the company is taking better care of their jobs than its rivals.

But as global competition grows more intense, the company could surely be put at a disadvantage by its inability to control this element of its cost base? "That's right, yes," says Mr Bon. He says he is quite prepared to put pressure on the French government over the issue.

"If the regulator says `They have to reduce their costs much quicker', then I think I would be right to go to the government to say: `I would like to do that but I am not able to because of you, because of the status of the civil servants'."

For now, Mr Bon is focused on his potential expansion into the British market. He makes clear that the NTL move does not mean his company is no longer interested in One-2-One. But analysts believe it wants to pay only about £8 billion sterling (€11.6 billion) for the company.

"The seller obviously had an idea of the price that was not the idea of the market, so they have to consider it again," he says. "If they consider it is better to sell at the market price, then we will again be in the competition."