|
Newsletters
|
|
|
|
|
|
WirelessDevNet.com Press Release
Mixed Bag in Orange's Q1
Orange has announced Q1 2005 revenues of just over €5.3bn, up 8.9% year on year (or 5.2% on a comparable basis). Subscribers reduced in France, but rose in all other markets giving an overall increase of 12.9%. Non-voice revenues continued to grow, accounting for 14.8% in France and 19.3% in the UK up from 12.8% and 17.3% respectively for the same period in 2004.
Orange continues to provide most of the revenue growth in the France Telecom Group, and now accounting for 45.8% of the overall revenue. However Orange will be concerned over the UK's negative revenue growth of 4.3% together with the negative subscriber growth of the French operation. Carrie Pawsey, Analyst at Ovum, comments:
Comment: "Q1 2005 provided a mixed bag of results. On the positive side: revenues and subscribers overall have increased; data as a percentage of revenues increased in France and the UK; and 3G was launched in France and UK during Q4 2005 and has attracted 52,000 subscribers in France generating an ARPU of €105 per month. Poland was the star performer, increasing revenues by 31.4% and subscribers by 33.4%.
But on the negative side: the UK performed badly, with revenues declining by 4.3% year on year, ARPU declining from Euro 273 to 270 and minutes of use per subscriber declining from 143 to 142; and subscribers declined in France by 4.5%.
Orange stated that the revenue reduction in the UK was due to falling termination rates. But we argue that the Orange UK brand has lost its way. Only this week an informal internal poll showed our collective experiences have seen a marked reduction in customer care and quality of service which can only result in higher churn for the operator.
The reduction in ARPU and minutes of use in the UK is a worrying trend. Although UK contract customers rose to 33.6%, the majority of its customers are prepaid. Encouragingly Orange is trying to increase customer spend of this segment through its recently introduced loyalty scheme for high spending prepaid customers called 'Repay'.
Orange is facing increasing competition in its core markets of UK and France. In the UK, 3 has targeted its customer base and now has over 3m customers as well as a number of new MVNOs entering the market, none of which are on the Orange network.
In France, increased competition has again come through a large number of new MVNOs entering the market, which the regulator has actively encouraged. Until recently Orange France has been careful to form deals only with companies which offer little real competition. However Orange's deal with Tele2, which was announced just two weeks ago, should bring a serious competitor into the market and we could see an impact on retail prices."
|
|
|
