US investors, already less than enthusiastic about technology stocks, were a factor behind the scaling back, as was the vendors' determination to ensure a decent premium for investors in first dealings. But there is no disguising the general backdrop of worry that Orange will end up going the same way as the cable companies, whose shares have done nothing since being floated on the stock market.
Orange is the newest of Britain's four mobile telephone operators and has proved enormously clever in capturing the minds and pockets of the British public. It takes a high proportion of all new subscribers to mobiles and is seen as a serious threat by the dominant players, Cellnet and Vodafone.
So far so good. The problem is that Orange's birth has coincided with a dramatic change in the mobile market. The new breed of mobile subscriber is much more price conscious, much more discerning, quite a different class of person altogether from the traditional mobile phone stereotype. The outcome may indeed be bright for Orange, but right now it remains a little blurred.
Orange's attraction has been its affordability and such earth-shattering initiatives in user-friendliness as charging by the second. Until recently its major rivals have played on the fact that their coverage is much greater - hence the justificaton for higher prices. Now they are beginning to play Orange at its own game. Prices are coming down. This is not yet a full- blown price war but Vodaphone and Cellnet are not going to allow Orange to take market share from them at the present rate for ever.
No one disputes the fact that the mobile market will continue to boom through to the end of the decade, potentially trebling from today's 5 million subscribers. In theory there is enough room for all four players. But even in a growth market, you don't add on capacity at this rate without serious damage to profitability. Prices will continue to fall while the demand is for standards of service to rise. What has been a glamorous, hi-tech business could easily become a commodity based one. The spectacular stock market success of Vodafone is unlikely to be repeated again.
This could be Vosper's death warrant
By choosing Yarrow as the sole shipyard for frigate and destroyer construction, the Ministry of Defence may have signed a post-dated death warrant for Vosper Thorneycroft. With the demise of Swan Hunter last year, Vosper Thornycroft and GEC's Yarrow were the only two warship yards left. Many believe that is one too many.
As ever in this industry, there are more contractors than there are orders. That is something that applies not just to warship building. In nearly all sectors of the European defence industry it is the same story. That is why the French government last week announced major structural changes to its armaments business, and why the likes of British Aerospace and GEC are desperately seeking cross-border mergers and alliances.
Both Yarrow and Vosper Thornycroft were going to cut jobs if they failed to win yesterday's hard-fought battle for the Type 23 frigates. The whole future of Yarrow would have been put in jeopardy if GEC had failed, not withstanding the promises it made to keep the yard open when it acquired VSEL.
During its bid battle with BAe for VSEL, the Trident submarine maker, GEC gave undertakings to the Monopolies and Mergers Commission that it would not close Yarrow if it won the contest. By throwing Yarrow a lifeline with the frigates order, the Ministry of Defence has spared GEC severe embarrassment.
Instead, it is Vosper that now faces problems. Building warships is a feast or famine business. If it doesn't secure orders soon, Vosper will go hungry. Yesterday's announcement of 300 job losses will not be the last. The bulk of existing orders end in mid-1997, leaving Vosper with a contract to deliver just one minehunter a year until 2001.
Vosper says that there is plenty of work on the horizon, but the time lag between winning a tender and starting work on it can be frustratingly long. Things look bad indeed.
Newspaper outlook looks promising
In this, the midst of the annual reporting season for the UK's newspaper publishers, there are finally some concrete signs that the industry may have turned a corner. Buffeted by soaring newsprint prices and a punishing cover price war initiated by Rupert Murdoch's News International, the business has had a lousy two years. Even traditionally profitable groups such as the Telegraph and the Express have seen earnings plummet.
The outlook, however, is for the first time in ages beginning to look quite promising. Newsprint costs are still punishingly high - as much as 65 per cent higher in 1996 than in 1994 - but the relentless pace of periodic increase, the most recent in January of this year, now seems to be abating. Even better, there has been a truce in the circulation war, with even Mr Murdoch's titles, the Times and the Sun, pushing up cover prices. Out of the woods? Well, not quite. There is still intense competition in all sectors of the market, from the quality broadsheets to the mid-market tabloids through to the popular press. Thinner newspapers, with editorial space at a premium, are still the order of the day. The boom days of extra pages and new sections - forget it.
Other cost pressures persist, including printing and distribution. Only to a limited extent have these been cut by recent moves toward "collegiate" sharing of costs. The national newspaper market is mature and gently declining. Attention to costs has become a way of life.
Smarter publishers are looking at innovative ways of extending their franchises into new media - electronic versions of their newspapers, for - example. Furthermore, though circulation is declining overall, the business still throws off plenty of cash, making it a useful springboard for the likes of Mr Murdoch, who has used his newspaper titles to promote and fund his other interests - satellite television, for example.
All the same, the Beaverbrook days are clearly over, and the business is now about managing decline and leveraging the obvious value of newspaper titles into new, cutting-edge lines of business. Not that this will deter, the budding newspaper proprietor - of which, happily for the industry, there are always a fair few among the rich and famous.Reuse content