Orange Juices Free Broadband Battle
Orange (NYSE: FTE) is reportedly finalizing plans to announce a free broadband service to coincide with the June 1 launch of its merged U.K. operations under the Orange brand. (See France Telecom Culls UK Staff.) By converging its wireless and broadband operations, the company hopes to use its strength in the mobile sector to retain and lure new customers –- a move that has taken on greater importance with the launch of "free broadband forever" with Carphone Warehouse Group plc (London: CPW)'s TalkTalk service. (See Free Broadband Comes to the UK and Top Ten Best New Services.)
According to the Guardian newspaper, in an attempt to hang on to Wanadoo's 2 million Internet users (one million broadband and one million dial-up) Orange will serve up free broadband and cheap fixed-line calls to customers who sign up for a two-year mobile phone contract. TalkTalk requires customers to sign up for at least 18 months.
Referring to the report as "speculation," a spokesman for Wanadoo cagily told Light Reading that "Orange has not finalized any free broadband offer."
But such a move would hardly be unexpected. If early interest in Carphone's service is anything to go by -– it signed up 25,000 customers within the first 48 hours of announcing the package –- it'll be hard for the U.K.'s other operators not to follow suit with bundles of their own.
Companies like the tasty-sounding biscit have already popped up with free broadband services, while cable operator ntl group ltd. (Nasdaq: NTLI) is in the process of acquiring Virgin Mobile Telecoms Ltd. . (See Biscit Does Free Broadband and NTL Takes Virgin.)
Mobile operators Vodafone Group plc (NYSE: VOD) and Telefónica SA (NYSE: TEF)-owned Telefónica Europe plc (O2) are also expected to join the fray, either through acquiring and building out a network, or leasing access and capacity. Vodafone is set to announce its plans on May 30. (See O2 Confirms DSL Aspirations and Mobile Giants Size Up DSL.)
Through Wanadoo, Orange is taking the local loop unbundling approach, which gives it control over capacity and pricing. The operator has unbundled about 200 BT exchanges so far and plans to install its kit in 500 by the end of the year.
— Nicole Willing, Reporter, Light Reading