news


Is Orange’s ‘Unique’ compelling?

Orange is set to become the first UK mobile operator to launch an FMC service when it introduces its so-called Unique product on November 1. There are doubts, however, about whether the initial offering will be compelling enough to generate significant take-up.

Unique phone will enable Orange’s customers, for a monthly fee, to make unlimited calls to landlines and other Orange mobiles at any time while at home.

The service works over Wi-Fi via the operator’s Livebox modem. Outside the home, the phone operates over Orange’s mobile network.

Calls made outside will be deducted from the customer’s monthly-minutes bundle or charged at an extra per-minute rate if the inclusive allowance has been used up.

Orange says it is expecting Unique to appeal to customers who like to keep up with the latest technology and might already own an array of gadgets such as PDAs, games consoles and iPods.

Orange will launch the Unique service with three Wi-Fi-enabled handsets: the Motorola A910, Nokia 6136 and Samsung P200. The handsets will come free with the operator’s tariff packages.

A household can have up to six Unique phones, with three users able to make calls or surf the internet via broadband at the same time.

Two tariffs will be available with 18-month contracts, each representing one of Orange’s animal brands (MC, 14 Mar, 2006).

The first, Canary 50, will be charged at £50 (Eur75) a month. In addition to unlimited calls from the home, customers will receive an extra 600 voice minutes to any network and 400 text messages.

The other price plan, Panther 65, costs £65 a month and includes 1,200 additional voice minutes and 250 text messages. Both tariffs include unlimited off-peak mobile data usage for the first two months.

Under both plans, calls to landlines and other Orange phones outside the home after the customer’s monthly minutes have been used up will cost 12p a minute.

And outside the inclusive bundle, it will cost 35p a minute to call other mobile networks both in and outside the home, and 12p per text message.

It seems unlikely, however, that the pricing scheme will be striking enough to attract large numbers of customers. For a start, a charge of at least £50 a month is getting close to the upper end of the consumer-tariff scale.

The tariffs also do not seem particularly eye-catching in comparison to Orange’s other tariffs.

For instance, customers signing up to a normal 18-month Canary package for £40 a month receive just as many anytime minutes and texts as on the £50 Unique phone package.

And although the Unique service includes unlimited calls while indoors, under the £40 tariff customers already receive a very substantial 10 hours of talk time.

They would have to spend a further £10 on calls on top of this to justify switching to a £50 tariff.

And that does not even take into account the unlimited evening and weekend calls to Orange numbers provided on the £40 tariff.

These factors appear to largely negate the need for unlimited calls at home offered on Orange’s Unique tariff.

Similarly, there is a £55 Panther tariff that offers the same monthly anytime minutes and texts as the Panther 65 Unique phone tariff, but for £10 less.

The Unique packages do include broadband, at a speed of up to 8Mbps, but customers can receive it anyway if they sign up to any Orange contract priced at £30 or above.

John Delaney, an analyst with Ovum, says that he “can’t see anything enormously compelling” in the Unique offer.

He says that Orange might do better if it offered flat-rate tariffs at a much lower price, adding that operators including Orange have yet to launch prepaid FMC tariffs with appealing rates.

However, bundling in broadband with Unique is one advantage Orange has over the Fusion FMC service provided by UK incumbent BT.

BT’s Fusion service offers calls via broadband over a Bluetooth connection in the home and operates on a mobile network via BT’s MVNO agreement with Vodafone elsewhere.

But the service requires users to sign up to a broadband package first. An 8Mbps BT package costs at least £17.99 a month, although the user pays only £9.95 a month for the first six months.

Another advantage Unique has over BT Fusion is that BT charges for most calls within the home outside any inclusive minute allowances.

For instance, calls to UK landlines are 3p a minute at peak times and 5.5p an hour off-peak, while calls to other BT mobiles are 10p a minute.

The only calls that are free are off-peak calls to landlines, provided the customer chooses an evening-and-weekend plan.

Comparing its service to BT’s, Orange says that “overall, we believe our offer is more cost-effective, as customers can now enjoy discounted calls at home and all other calls at their usual talk-plan rate, as well as benefiting from services such as free broadband”.

However, BT Fusion offers tariffs at a more affordable monthly price for consumers, although with fewer inclusive minutes. For instance, one package includes 100 anytime minutes to any network for £20 a month under an 18-month contract. And the first six months’ line rental is free.

Combined with BT’s cheapest 8Mbps broadband offer, this is £12 cheaper than Orange’s least expensive Unique service. BT’s combined offer comes to £37.99 a month.

Something that does not bode well for Orange is that even with these cheaper tariffs, BT Fusion has struggled to attract customers. At the end of March this year, some nine months after Fusion’s June 2005 launch, the service had a mere 30,000 subscribers.

And operators that have launched FMC in other countries, such as Italian incumbent Telecom Italia, have also experienced a slow rate of uptake.

The take-off of FMC has been hindered by a number of factors, including an extremely limited handset range and technical problems such as the inability to achieve seamless handover when a customer moves between a Wi-Fi and mobile network.

However, Orange insists that its UMA technology resolves this problem. Further, if a user initiates a call at home and then goes outside onto the mobile network, the call still falls under the unlimited offer.

And although Orange will have only two handsets at launch, it says it plans to offer up to 10 by end-2007. This could be an important factor because, as Delaney points out, a large proportion of customers choose a service because they like the handset rather than the offer itself.

BT Fusion and most other FMC offers so far have included only one or two handset models. BT says it will step this up to three when it moves from Bluetooth to Wi-Fi connectivity some time in the autumn.

Orange does not say how quickly it expects its service to take off in the UK. However, in France, where the same product launched on October 5, Orange is aiming to have signed up a fairly substantial 15% of its customers to the service by end-2008.

And by the end of next year, it is aiming for 1 million of its 22-million strong customer base to be Unique users. The offer has slightly different tariffs than the UK one, however.

Orange also plans to launch the service in the Netherlands on October 17, Spain in November and Poland at some point in 2007.

Within the UK itself, rival mobile operators do not appear overly concerned by Orange’s offer and do not plan to rush in with their own FMC launches.

O2 and Vodafone have both recently given themselves the option of introducing FMC offerings in future – O2 with the acquisition of broadband provider Be in June and Vodafone through its wholesale broadband deal with BT in September.

O2 says it wants to make sure that the service functions smoothly before launching and indicates that it plans to introduce an FMC offering some time next year. The operator expects to announce its plans in more detail around the middle of November.

Vodafone says it is likely to launch an FMC service “over the course of the next few years” but has not given any details. In reference to Orange’s offer, Vodafone says it is “too early to offer any conclusive view of it”.

Mobile Communications Europe is part of the Informa family of telecoms and media-related publications published by Telecoms.com’s parent, Informa Telecoms and Media.

Tags:

Leave a comment

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Polls

How have open source groups influenced the development of virtualization in telecoms?

Loading ... Loading ...