Orange boss promises the future is bright, despite 450 job cuts

Tom Alexander, the new boss of Orange, yesterday claimed he would make the mobile phone company the UK's "best-loved communications business", with new investments in customer service and network upgrades.

Mr Alexander promised to reduce Orange's reliance on Indian call-centres and create 500 more customer-facing jobs, but also warned he would axe 450 middle- management positions in order to turn around a company suffering from years of under-investment.

Mr Alexander, who had retired following his flotation and sale of Virgin Mobile in 2006, was lured back into the sector in January by the prospect of reinvigorating a lacklustre incumbent. Quality – of customer service and of network coverage – is at the centre of Mr Alexander's plans. "I believe there is a space we can fulfil in the market – we can differentiate ourselves around quality," he said. "We are now looking at reorientating the business in a common-sense way, that is not around technology or tariff but around the customer."

On the customer service side, Orange will be opening 60 new shops over the course of this year and next, taking its total estate to nearly 400. It is also setting up a new online store and developing customer service channels using instant messaging, the internet and text messaging.

On the network side, significant investment will go into both the 2G and 3G infrastructures. Some 450 new 2G base stations will be rolled out, starting this year, to improve the coverage of existing phone services. There will also be enhancements to the 3G network, providing speeds of up to 7.2 Mbit/s in 30 cities within 18 months. By 2009, Orange will have built a new super-fast network offering speeds of more than 14 Mbit/s.

Mr Alexander said he wanted Orange to top the mobile league, but would not commit himself to concrete targets. "I have a very clear ambition to make us the best-loved communications brand," Mr Alexander said. "If we can get the hearts and minds of customers, then the hard numbers will follow."

Analysts said that while it was difficult to fault the strategy, Orange had provided few details about what results would be achieved, or how. "It is not exactly controversial reading, but the plan to perform well cannot be tested in advance," James Barford, from Enders Analysis, said. "But Orange did used to be the best-loved, and Tom Alexander has a lot of experience in building up a brand, so it is not unrealistic."