Sunday, February 26, 2006

Orange UK Goes Landline

Usually it's the other way around but mobile network operator Orange plans to offer landline service with a single bill for both mobile and fixed services to small and medium-sized enterprises in the U.K. Jeremy Green at Ovum notes that this "service has become possible as a result of UK regulator Ofcom's Wholesale Line Rental programme, which obliges BT to offer line rental to other operators. Curiously, the offer is not available to sole traders or partnerships, who might be expected to be among its most enthusiastic recipients."

Green thinks "Orange's move is smart and sensible. It represents a welcome transition from earlier delusions of grandeur, when mobile operators thought that the future of voice telecoms would be purely mobile, and a recognition that many SMEs will not be giving up their landlines any time soon."

He writes that "Ovum's research shows a strong desire among SMEs throughout developed markets to buy both fixed and mobile services from a single supplier. Orange has already begun emphasising its ability to be a one-stop-shop in its home market, where it can draw on the resources and brand strength of owner France Telecom. In the UK, wholesale line rental is the missing piece that will allow it to move towards a similar strategy."

Green concludes that while "Orange is also claiming a 20% saving on BT tariffs for SME customers," Ovum is "less convinced by this, because customers who are driven primarily by price considerations can probably get a better deal elsewhere. The real attraction of the Orange proposition is reduced complexity and improved account management."

Over at, Rachel Lashford at Canalys said, "I think this is all about Orange marking its territory as a full service provider." Mark Blowers at Butler Group added, "The mobile market is pretty saturated and Orange is looking around for new revenue opportunities. Smaller organisation are looking for a one-stop shop, and the last thing they want is contracts with BT for fixed-line, Orange for mobile etc. Orange has recognised this and needs to provide this kind of service."