Orange pips rivals in mobile race
Thursday 03 April 1997
Three networks - Orange, One2One and Cellnet - followed the lead of Vodafone earlier this week in releasing customer numbers for the first three months of the year. They show the two older networks, Vodafone and Cellnet, have been growing more slowly than Orange and One2One, raising doubts about their marketing strategies.
Orange's subscriber base increased by 109,000 between January and March, a much stronger rate than analysts had forecast, bringing total customer numbers to 894,000. The group also revealed that churn, the rate at which customers leave the network, rose slightly to 19.1 per cent from 18.6 per cent in December. Orange shares rose 1.5p on the figures, to 207p.
The real surprise came from One2One, the company jointly owned by Cable & Wireless and US West. It grabbed the number two spot in the growth league by adding 75,000 net new subscribers in the first quarter, taking customer numbers to 620,000. The statistics vindicate the network's expansion strategy under its recently appointed managing director, Jan Peters. An extra pounds 1bn is being invested to raise the network's coverage to 80 per cent of the UK, while an estimated pounds 20m has been spent on television advertising.
The One2One numbers easily beat those from Vodafone, released on Tuesday, which showed net subscriber growth of 67,000.
Cellnet trailed well behind its rivals, growing its customer base by just 12,000 in the first three months of the year to 2.7 million. The company, 60 per cent-owned by British Telecom, blamed the figures on changes to contract terms which had reduced customer notice periods to one month.
Analysts also said customer discount packages had backfired. Jim McCafferty, from stockbrokers Hoare Govett explained: "The lesson for Cellnet is there's no point in adding customers today if they're going to leave tomorrow."
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