Summary
France Telecom SA's Orange is all set to start selling iPhone from November 10. It has entered into two years agreement with Apple to sell iPhone in UK market. This agreement had ended the exclusivity of its rival Telefonica SA's O2 mobile network It will sell 3G and the latest model 3GS. This deal will hoist a cutthroat competition between the two players to acquire subscribers one’s network and finally customers will get the best of the deal.
Analysis
Iphone will go Orange on November 10 ending the exclusivity of its rival TeleO2. The release date was not confirmed by Orange since it confirmed the two year agreement on September 28.Orange will sell both 3G and 3GS to its UK customers. Orange is currently the third largest mobile operator in UK with a market share with 21.5 %. Company however faced an aggressive competition from other two giants in the market O2 and Vodafone. These bigger fish continues to shore up their market share by aggressive product and price offerings. With this deal Orange got a platform to re-invent the wheel and strengthen its roots in the market.
More than a quarter of million Orange customers have expressed interest in the iPhone since the group announced its deal with Apple, Tom Alexander, chief executive of Orange U.K. said in a statement. With O2 customers were not have a choice and its exclusivity helped it to bolster sales but things are different with Orange. Orange may get an advantage of succeeding O2 in the market. Customers are already aware and mesmerized with iPhone effect thus Orange doesn’t have to spend much in advertisement.
Tough Orange has not disclosed its tariff plan yet however Orange can compete with O2 on price. Since the handset price has fallen since its launch, Orange may take an advantage to attract both cost conscious and high end customers. It can also bang upon better network coverage. There are many subscribers using Iphone in one circle of O2 and the capacity is not increased by O2 thus customers are facing network coverage which may become the bull’s eye for Orange. UK’s customers are more than happy with the deal and preparing themselves to hold an iPhone at a cheaper rate and get an access to enhanced network coverage and better plans.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
