Orange claims first place in mobile race

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The Independent Online
Orange, the digital mobile phone network, yesterday claimed undisputed market leadership over its three rivals in the race to sign up customers, and predicted a substantial increase in revenue from subscribers.

Announcing results for last year, Orange said its customer base was growing at a rate of more than 30,000 net new subscribers a month this year, easily beating Vodafone, Cellnet and One-2-One.

Hans Snook, group managing director, said Orange had more than 850,000 customers at the end of February, following a 107 per cent increase to 785,000 last year.

He said: "We're attracting more of the better quality subscribers than any of our competitors. All the information we have from statisticians and dealers and distributors says that we are undoubtedly the fastest- growing network this year."

The news boosted Orange's share price, which slumped last year after fears of a price war with its rivals. The shares closed 5p higher at 219p.

The group's revenue per subscriber, one of the most closely watched statistics in the industry, remained stable at pounds 442 a year on average, compared with pounds 444 at the end of 1995. Its share of the mobile market increased from 7 per cent to 11.5 per cent, and it took 28.5 per cent of new customers during 1996.

Graham Howe, finance director, forecast that Orange would break even, excluding interest charges and depreciation, by the middle of this year. He said the company was still on course to make a profit in 1998-99.

Another boost is expected from the hike in the wholesale charge Orange makes for incoming calls from BT's fixed phone network, which went up last month from 6p a minute to around 14p. Based on existing usage patterns, the increase would raise average revenues per subscriber from pounds 58 to pounds 135, increasing the overall annual spend to pounds 520. Mr Howe explained: "You will probably find the real increase is a bit lower because people will make fewer incoming calls, but there will still be a rise in revenues from an already strong base."

Mr Howe claimed Orange's low churn levels, which measure how quickly customers switch to rival operators, meant its customer base was more valuable. Churn rose only slightly last year to 18.6 per cent from 18.1 per cent in 1995, though the figure is still the lowest in the industry.

Orange's turnover last year rose by 171 per cent to pounds 619m, including the impact of acquisitions. Losses before tax jumped from pounds 141m to pounds 229m, reflecting a surge in staff numbers and an extra pounds 220m invested in building up the network.

Separately, Cancall, the Danish mobile phone maker owned by Alan Sugar's Amstrad group, launched what it claimed was the world's first handset which could work on both sides of the Atlantic.

The move comes as all the mobile networks are expanding opportunities for so-called "global roaming", where customers can use their phones on different networks around the word. The Dancall phone will work on two different wave bands used by mobile networks in the UK and abroad.