Gates lines up Orange

Microsoft looks to develop UK as base for European operations

MICROSOFT is exploring the possibility of forming a strategic alliance with Orange, the mobile phone company, according to industry sources.

The entry of Bill Gates's company into the UK telecoms sector would make Orange a much heavier hitter among companies jockeying for position in the converging computer, telecoms, and broadcast industries. It would also strengthen Microsoft's grip on another platform of the converging technologies.

Microsoft entered the UK cable TV sector on 25 January when it invested pounds 300m in NTL, Britain's third-largest cable TV company, and a tie-up with Orange would be seen as another step down the same road.

"It may or may not come off, but the Orange thing is part of a larger picture," said a City banker. "The idea is Orange and NTL will link up, with Microsoft as the big brother."

Paul Mountford, UK head of the American internet giant, Cisco, added: "A new generation of products linking computers, television sets, and mobile phones is approaching. It makes sense for Microsoft to invest in distribution systems for its products."

Orange denies it is in talks with Microsoft. A spokeswoman declared on Friday: "There is absolutely no truth in this rumour."

Industry sources insist, nevertheless, that the prospect of an alliance, including an infusion of Microsoft cash into Orange, is the subject of discussion between Microsoft and Orange shareholders.

Hong Kong based Hutchison Whampoa owns 49.2 per cent of the mobile phone company. British Aerospace owns 5 per cent. Since BAe acquired Marconi, GEC's defence business, last month, there has been speculation BAe might unload its Orange holding.

In an interview with The Independent on Sunday on Friday, Microsoft UK managing director Neil Holloway declined to discuss the possibility of an Orange tie-up, but he did confirm the company's interest in telecommunications.

Explaining the company's strategy, he said: "We want to focus on what's slowing down growth. [That means] the deployment of high-speed networks, whether cable, satellite, or wireless ... We need to give the communications infrastructure a push."

A senior industry executive characterised Microsoft's interest in Orange in more aggressive terms: "Microsoft almost missed out on the internet revolution," he said. "They want to make damn sure not to miss out on the development of other distribution systems for their software."

The executive pointed out that, in light of allegations by the US Justice Department that Microsoft violated anti-trust law, the software giant is unlikely to do high-profile deals in the US, but would experiment and build a network in the cable TV and telecoms businesses internationally. Last month Microsoft also invested $300m (pounds 183m) in UPC, a Dutch cable TV company.

One industry observer suggested that Orange would resist a tie-up with Microsoft on the grounds that its future would be better served in an alliance with other European mobile phone companies. Washington and Brussels are currently stymied in talks to establish a single global standard for "smart" mobiles. The outcome will influence whether Microsoft or the UK's Psion will gain the inside track in linking "smart" mobile phones to computers and TV sets.

"Orange would also be attractive to Microsoft because it has always sold direct to customers rather than via intermediaries," an industry exec- utive said. "Orange would have a lot of data on high-earning clients who would be interested in new Microsoft products."

PROMOTED VIDEO
News
Happy in his hat: Pharrell Williams
people
Arts and Entertainment
Stella Gibson is getting closer to catching her killer
tvReview: It's gripping edge-of-the-seat drama, so a curveball can be forgiven at such a late stage
News
Brazilian football legend Pele pictured in 2011
peopleFans had feared the worst when it was announced the Brazil legand was in a 'special care' unit
News
i100(More than you think)
News
Phyllis Dorothy James on stage during a reading of her book 'Death Comes to Pemberley' last year
peopleJohn Walsh pays tribute to PD James, who died today
News
peopleExclusive: Maryum and Hana Ali share their stories of the family man behind the boxing gloves
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Argyll Scott International: Service Desk Analyst

£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...

Argyll Scott International: 2x Service Desk Analyst

£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...

Recruitment Genius: Senior Execution Trader

£30000 - £250000 per annum: Recruitment Genius: A global Rolling Spot FX, Comm...

Citifocus Ltd: ACA - Financial Reporting

£Attractive Package: Citifocus Ltd: Chartered accountant (ACA or CPA), must be...

Day In a Page

Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

Christmas Appeal

Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

Is it always right to try to prolong life?

Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

What does it take for women to get to the top?

Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

Knitting pretty: British Christmas Jumpers

Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

French chefs campaign against bullying

A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

Just what you need on a New Year hangover...

Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
Cuba set to stage its first US musical in 50 years

Cuba to stage first US musical in 50 years

Claire Allfree finds out if the new production of Rent will hit the right note in Havana
Christmas 2014: 10 best educational toys

Learn and play: 10 best educational toys

Of course you want them to have fun, but even better if they can learn at the same time
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
There's a Good Girl exhibition: How female creatives are changing the way women are portrayed in advertising

In pictures: There's a Good Girl exhibition

The new exhibition reveals how female creatives are changing the way women are portrayed in advertising
UK firm Biscuiteers is giving cookies a makeover - from advent calendars to doll's houses

UK firm Biscuiteers is giving cookies a makeover

It worked with cupcakes, doughnuts and macarons so no wonder someone decided to revamp the humble biscuit