Orange offers landlines in UK

UK mobile operator Orange has tapped BT Wholesale to supply it with landline services that it will sell to consumers under its own brand.

The deal takes Orange into the quadplay arena, support Orange’s strategy to offer mobile, broadband, fixed and IPTV services from a single provider.

Since the launch of BT Wholesale’s managed services strategy one year ago, BT has landed a series of major partnerships with the likes of Vodafone, T-Mobile and O2, amounting to around £1bn in revenue.

Under the terms of today’s agreement, Orange will buy a suite of integrated services from BT Wholesale’s White Label Managed Services portfolio. BT will provide Orange with a managed service for all of its fixed line telephony requirements, consisting of wholesale line rental, wholesale calls, and end to end customer management. This includes the set up and ongoing management of Orange’s customer call centres, specifically to provide its customers with telephone support around fixed line calls.

Asif Aziz, director of Home Products at Orange, said, “It is our goal to provide mobile, broadband, fixed line and TV to every house in Britain. This is an important step in making that a reality by providing our customers with all of their communication needs from one supplier. The agreement enables us to provide our customers with all their home services in one bill, with additional customer service needed to support this addition to our product portfolio.”

Ovum analysts Fernanda Mello Veiga, Mark Main and Jonathan Coham, said that from a price perspective, Orange has been clever. “The price of both packages clearly undercuts BT’s closest package (BT Together Option 2 + broadband), and offers a good incentive for customers to take the premium package. Customers can pay a mere £1 to upgrade from Home Starter (which additionally requires BT line rental) to Broadband Max. This adds unlimited, faster broadband for a minimal fee, but nicely cuts BT Retail out of the voice revenue stream.”

However, the analysts expressed concern that Orange is pushing single billing as the new service’s competitive advantage. “We agree that customers will appreciate a single bill. But the contract length is a lot longer than the 12 months other providers are offering. We are unsure that receiving a single bill at the end of the month justifies being tied into one provider for so long. Customers should be given an option to choose between 12 and 18-month contracts.”

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