Orange lifts lid off 3G plans - but snubs a price war

The mobile phone operator Orange yesterday unveiled plans to launch its third generation mobile phone service in the summer but insisted it would not get drawn into a price war.

The announcement came as 3, which has had to cut the price of its 3G service since it launched a year ago in a bid to win customers, confirmed it was launching its offering in the UK on a pre-pay basis.

Calls on its pay-as-you-go service, called 'ThreePay', will cost the same as on its monthly contract service, although customers will have to buy the handsets upfront for about £150. "With ThreePay, 3 is now addressing 65 per cent of the UK mobile market instead of the 35 per cent it had been reaching previously with just its contract proposition," it said.

Orange, which is owned by France Telecom, said it was hoping to go live with its third generation service from June in both France and the UK. It plans to launch its 3G service initially on a contract basis with a pre-pay offering expected to be available in the fourth quarter of the year, although it remained tightlipped on pricing.

John Allwood, the executive vice president of Orange UK, said: "We won't release pricing information at the moment but we're not looking to undercut or slash prices like 3... we believe these are premium services and people will be happy to pay for the speed and the service they get."

Third generation, or 3G services, offer customers faster video calls and messages and enable users to watch short video clips on their handsets. Orange does not, however, expect the 3G service to become a mass market proposition for at least another year and, more likely, in the second half of next year. "I would say you'd be looking towards the second half of 2005 to be getting into the mass market," Mr Allwood said, adding: "We're happy we've secured enough handsets for what we think the demand will be towards the end of the year."

Orange saidits 3G network, which it is still testing, now covered more than 20 cities including London, Manchester, Edinburgh, Cannes and Lille.

"For anybody who might have thought we weren't taking 3G seriously or not competing with Vodafone, we're demonstrating how ready we are," Mr Allwood said.