8/6/2008 3:25:00 PM
Latest numbers show Orange left trailing behind O2
the scale of Orange’s task to catch up with O2 was underlined last week, after it revealed it added just 1,000 new customers between April and June this year.
In contrast, O2 added 275,000 new customers in the same period. It is especially galling for Orange given that it was a marked improvement from the previous year when it had an even poorer trading period.
Orange has 5.9 million contract customers compared with O2’s 7.2 million. Orange has around two million fewer customers across both prepay and contract; O2 is ahead with 18.7 million customers. Orange has pulled in £1.1bn in revenues, while O2 is at £1.3bn.
One analyst said: ‘Revenue is becoming an interesting metric as the operators are all looking to pull more cash out of relatively slow customer additions.’
O2 also appeared to be on track with its fixed-line broadband target of one million by 2010. It added 63,000 in the last quarter, taking its fixed-line broadband base to 194,000.
Meanwhile, Orange appears to have slowed its fixed-line broadband strategy after a series of customer service problems earlier this year.
Orange has now set aside a £30m advertising kitty for its ‘I am’ campaign for the remainder of the year, and spent £10m alone in July as the campaign kicked off with a mixed response.
The campaign has raised expectations and put pressure on Orange UK to deliver better revenue and additional customers in the latter part of the year.
Orange has been giving heavier discounts than any of the other operators over the last 12 months to attract and keep customers on prepay and contract.
Orange’s CEO, Tom Alexander, has instigated an internal restructure with a series of redundancies to integrate the mobile and broadband divisions, as well as making the company more efficient.
O2 is expected to continue the momentum in its second-half trading, fuelled by unrelenting demand for the 3G iPhone and a competitive position on prepay.
However, the rate of O2’s growth could slow down after news last week that it was scaling back its subsidy on top-end handsets such as the Nokia N95.