Orange plans to offer hybrid deal

ORANGE, THE mobile phone operator, is set to launch a new package which combines traditional contracts with prepayment elements in a bid to offer better value to subscribers.

Sources close to the company said yesterday the packages could be introduced during the fourth quarter, timed to precede the pre-Christmas selling season when consumer demand typically soars.

Though pre-pay customers - by far the fastest growing sector of the mobile phone market - can purchase a handset and activate mobile service for as little as pounds 49, calling charges are far higher than the rates charged to contract customers who receive a monthly bill. Some pre-pay rates are as high as 50p per minute, while some packaged rates to contract customers can be as low as a penny per minute for off-peak calls.

Orange plans to address what it sees as a misconception among mobile users that prepay is cheaper and offers better value than contract rates. It is already using a number of direct marketing approaches to entice pre-pay users to become contract customers.

The attempt to transfer some of the runaway growth in pre-pay to contract service coincides with expectations that the company will today report a narrowing in first-half pre-tax profit losses to around pounds 35m from pounds 49.1m a year ago. Analysts expect interim sales to rise by around 50 per cent to pounds 800m.