Orange set for prices squeeze

Price cuts could follow disappointing subscriber growth figures for mobile phone firm Orange, according to City analysts.

Price cuts could follow disappointing subscriber growth figures for

mobile phone firm Orange, according to City analysts.



Despite its heavyweight ’The future’s bright, the future’s Orange’ TV

campaign, the company achieved new connection figures of 130,000 - up

just 5000 on last year’s figures.



This 4% increase for the period was well below the extra business

attracted by rival companies One-2-One and Vodafone.



One-2-One achieved 206,000 new customers between October and December -

well above analysts’ predictions of 150,000. During the same period in

1996, it gained 85,000 new customers.



Market leader Vodafone’s net increase of more than 241,000 was double

analysts’ expectations.



For the same period last year, Vodafone produced 146,000 net new

customers, representing a growth of 65%.



At the end of the year, its UK contracted customer base was more than

3,140,000, with December turning out to be the best month’s performance

since the company began operating in January 1985.



The figures reflect Vodafone’s improved distribution strategy as a

result of the rebranding of its retail stores, Talkland and People’s

Phone, to the parent brand.



Cellnet, which is number two in the market, achieved 149,000 new

connections during the last quarter - a recovery from the high churn

rate it experienced earlier in the year.



This compares to 143,000 new users in the last quarter of 1996 and

represents an increase of 4.2%.



Analysts had anticipated that Cellnet’s new Social Life tariff would

help it gain around 150,000 new customers.



The mobile phone market, which has been sluggish for the past two years,

showed dramatic growth as a result of the four operators’ aggressive

marketing tactics.



The market grew by 45% in the final quarter of 1997 compared to the same

quarter of 1996, in line with analysts’ predictions.