Orange to spend £20m on raising UK market share

ORANGE, BRITAIN'S third largest mobile phone operator, yesterday cut calling costs and unveiled a £20m promotional blitz in a bid to raise its market share in the rapidly growing pre-pay segment.

ORANGE, BRITAIN'S third largest mobile phone operator, yesterday cut calling costs and unveiled a £20m promotional blitz in a bid to raise its market share in the rapidly growing pre-pay segment.

The new tarrif will cut Orange's peak calling rates for one version of the JustTalk offer to 25p per minute without network service charges. The movecomes days before the expected launch of Virgin Mobile, ajoint venture backed with £100m from One2One and Richard Branson's Virgin Group.

Fragmentation of mobile service packages, and the focus on attracting pre-pay customers, is increasing in the crucial run up to Christmas, during which time analysts believe up to one-in-12 Britons will buy mobiles. Hans Snook, the chief executive of Orange, said 3.5 million pre-pay handsets are expected to be sold by the end of the year.

Since pre-pay was launched last year, it has sped up consumer mobile take-up and now accounts for eight-out-of-10 new handsets sold. Orange won over half of new contract customers in the most recent quarter, but had only an 11 per cent share of the pre-pay market.

Mr Snook also accused the mobile industry of "knowingly fleecing customers" with network service charges unrelated to usage as well as selling vouchers with expiry dates. He said hidden charges could be costing consumers £500m annually. Orange's Just Talk pre-pay package will include free text messaging service for new customers until March.

Following Mannesmann's £18bn buyout of the UK mobile group last week, Mr Snook declined to say whether the German company would rename itself Orange AG. "It's pure speculation, but I think there's sound logic behind it," he said.

Nor would Mr Snook confirm whether he will join Mannesmann's board once the acquisition is completed. "We will make suitable announcements at the right time," he added.