Britain is gearing up for its first ever offering in mobile telephony shares with the launch yesterday of the pounds 2.4bn flotation of Orange, the mobile operator owned by the Hong Kong giant Hutchison Whampoa and British Aerospace.
Almost 60,000 people have already registered as potential private investors in Orange. But the City was disappointed at the expected valuation - between pounds 2.2bn and pounds 2.44bn - which was 20 per cent lower than had been anticipated by some analysts.
The company, which has done much to popularise the mobile telephone, said the aim is to ensure a healthy premium for investors when trading in the stock begins.
About 25 per cent of the shares will be offered in the sale, of which half will be in the UK and Europe. The offer will raise between pounds 530m and pounds 623m with the proceeds going to pay off debt to shareholders.
No limit has been put on the allocation for private individuals but Orange's customers are not offered any incentive to participate in the sale. One City analyst said that the limited availability of stock in the UK could result in a scramble for the shares.
Orange has built a reputation for bringing mobile telephony to the ordinary person It was launched almost two years ago and up to the close of business on Tuesday had notched up almost 450,000 subscribers in a total market of about 5.5 million.
The company said that the key issue is its share of total new subscribers to mobile telephony, which in January was 29 per cent.
In the same month it claimed 38 per cent of new customers on digital networks, which is where the future of the industry lies.
However, Vodafone and Cellnet, the dominant players, are rapidly rolling out their digital networks and are also beginning to attack Orange with what appears to be turning into a price war.
Hans Snook, group managing director of Orange, declined to comment on when Orange would be profitable, but City analysts expect it to break even next year.
Mr Snook denied the suggestion that Orange would be forced to drop prices as competition increases.
"Orange does not compete primarily on price and never has done. We offer quality and value for money," he said. "I would be very surprised if some of the headline tariffs we see offered by Vodafone and Cellnet will get down as far as the customer," he added.
Mr Snook said that the market remains "very, very strong" and will continue to grow robustly into the future.
He said that there is enough room for all four UK players, which in addition to Cellnet and Vodafone include Mercury One-2-One.
He pointed out the Orange has led the way in innovative products such as the ability to have two separate lines on one telephone.
Many people perceive the company as attractive because calls are charged by the second and customers are entitled to a certain number of "free" minutes depending on their monthly subscription fee.
This type of packaged subscription approach is now being adopted by Cellnet and Vodafone for some of their customers.
Following the sale, Hutchison Whampoa will own 50.49 per cent of Orange and British Aerospace 22.92 per cent. Dealings in the shares, which are expected to be priced between 175p and 205p begin on 27 March.
The company plans to launch a retail offer for UK private investors on 12 March with a closing date of 22 March.