How to get Orange's number

Those investors who believe that the future really is Orange are flocking to buy shares in Europe's third-largest mobile phone operator.

Those investors who believe that the future really is Orange are flocking to buy shares in Europe's third-largest mobile phone operator.

More than one million investors have registered their interest in the sale of 13 per cent of the company. The offer officially opened last week and people wanting to buy shares have until 4pm on 8 February to apply. Both retail and institutional investors can apply.

Shares are expected to be priced between 11.5 and 13.5 euros (733p to 860p) each. Retail investors are being courted with a discount on the institutional price - 50 euros, or 4 per cent, if the shares sell at the mid-point of the expected price range. Investors must apply for a minimum of £250 worth of shares, but there is no maximum limit.

As Orange is owned by France Telecom, those who hold a stake in the parent company are entitled to a preferential allocation of Orange shares. Retail investors holding at least one France Telecom share at the close of trading on 19 January are entitled to an allocation of up to two times more shares than other retail applicants.

If you are tempted to buy Orange, there are a few points to note. Orange is a French company so investors will be buying into a stock whose primary listing is on the French stock market, the CAC 40. Shares will be priced in euros rather than sterling.

However, UK investors will get the price quoted in sterling. And all dividends - if there are any in the future - will also be paid in sterling. This is made possible through Crest Depository Interests (CDIs).

No share certificate will be available, though you still remain the beneficial share owner. Each CDI represents one share. Your broker or Orange will hold your CDIs for you.

If you go via Orange, you can request the mini prospectus and application form from its share information office on 0800 085 8888 or download it from www.orangeshareoffer.com. Holding the shares through Orange will not incur an annual fee and there will be special dealing rates of a minimum of £10 per transaction. Information packs, including a mini prospectus, are also available from any of HSBC's 1,700 branches or Orange's 130 shops.

Orange names a number of selected brokers offering special deals, but it is worth remembering that you can also buy the shares through brokers that aren't on the list. Named brokers and advisers offering special Orange Share Offer services include Barclays Stockbrokers (www. barclays-stockbrokers.co.uk), Charles Schwab (www.schwab-europe.com), DLJ Direct (www.dljdirect.com), E*Trade (www.etrade.co.uk), HSBC Stockbrokers (www.hsbc.co.uk), Hargreaves Lansdown (www.hargreaveslansdown.co.uk) and TD Waterhouse (www.tdwaterhouse.co.uk).

Some nominee accounts charge a fee, so check the small print. Neither Charles Schwab nor DLJ Direct charge for their online initial public offering (IPO) service. DLJ Direct also offers commission-free purchase of Orange shares for 30 days after the stock market listing. All new UK dealing accounts also benefit from 50 days' trading at £5 per trade.

The advantage of buying your shares online is that the time-consuming and complicated paper-based application process is considerably reduced. Rather than wade through the 360-odd pages of the prospectus, you can look at the main points on your computer screen.

Another advantage is that if you aren't successful in getting all the shares you requested, your money should be returned fairly quickly - and certainly faster than if you were waiting for a cheque to arrive in the post.

Intermediaries such as Hargreaves Lansdown recommend holding your Orange shares in an individual savings account (ISA). If you haven't already used up your ISA allowance - £7,000 for this tax year (year ending 5 April) - the advantage of doing this is that you can ignore capital gains tax and will not have to mention the shares on your self-assessment tax form.

Hargreaves Lansdown has a special commission rate for Orange shares of 1 per cent (minimum £15, maximum £35 per holding) until June 2003. You may include any other UK shares, unit trusts or investment trusts within the Har-greaves Lansdown Orange ISA. There is no initial charge and an administration fee of 0.5 per cent (plus VAT) per year.

Whichever broker you choose, check how much it charges for trading the shares subsequently. Ecom Group, which has analysed stockbroker charges, argues that brokers who take a percentage of your deal when you buy or sell shares can be good value for investors with smaller funds. However, if you have a bigger portfolio, it might not be such a good deal.

Barclays Stockbrokers levies commission of 1 per cent per trade, with a minimum charge of £11.99 and a maximum of £39.99. But online broker Selftrade charges a flat fee of £12.50,which might be cheaper depending on the number of shares you buy.