Orange set for deal with Spotify rival in the UK

Orange is close to sealing a deal with Deezer, a music-streaming service targeting Spotify's home market, as it looks to broaden its entertainment offers to lure customers to its UK network.

Orange, part of the Everything Everywhere group, is understood to be close to agreeing a partnership with the French site, which announced last week that it would launch in the UK by the end of the month. Both companies declined to comment yesterday.

Orange has realised the importance of "these new digital services" to attract customers and had considered teaming up with Spotify but balked at the terms of the deal, according to an insider. The senior source added that the company was also more impressed with Deezer's mobile operation.

The partnership, which could be announced as early as today, will see the music service offered free to customers on certain Orange tariffs.

The mobile network has previously attempted to entice customers with music with the launch of Orange Music and Orange Monkey, although neither was a resounding success. Its film offers have been more popular, especially the Orange Wednesday two-for-one cinema tickets. This month it also teamed up with Apple to offer customers movie rentals via iTunes.

Deezer was set up in Paris four years ago by Daniel Marhely, and has grown to 20 million users worldwide. It has 1.2 million premium subscribers in France and already has a partnership with Orange in its home country.

The site, which does not run a free ad-supported service as Spotify does, said last week it planned to become "the number one destination for all UK music fans". It will offer a £4.99 a month tariff for those who want to listen to music on their computer or £9.99 a month for a mobile and offline service.

This comes a month after Spotify announced a partnership with Virgin Media. Virgin will offer the music streaming service through its television and mobile services.