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Friday, 6 July, 2001, 11:40 GMT 12:40 UK
Orange overtakes BT Cellnet

British Telecom's fightback is set to suffer a reversal with its demotion to third in the UK mobile phone operator league.

Figures due out by Monday are expected to confirm that Orange has seized second place from BT's Cellnet division.

At the end of March, the two operators were running neck and neck, boasting about 11 million subscribers each.
UK customers, end-June
Vodafone
12.5 million
Orange
11.9 million
BT Cellnet
11.6 million?
One2One
9.2 million?
Hutchison 3G
launch mid-2002

But Orange on Friday confirmed it had added 830,000 new customers in the three months to the end of June. Analysts expect BT Cellnet to say it has attracted only about 400,000 new users.

Demotion would come as a setback to BT, which is gearing up later this year to spin off its wireless arm, which includes the Cellnet business.

The proposal is part of a plan, including a focus on Europe and sell off of non-core assets, to pull the firm out of a trading stall and reverse a sharp fall in the group's share price.

Growth eases

Confirmation of the subscriber data forecast by City analysts would confirm a slowdown in the growth of the UK mobile phone market.

Cellnet attracted 918,00 new subscribers in the January-to-March quarter, with France Telecom's Orange adding 1.2 million.

And market leader Vodafone on Thursday revealed it had won 269,000 new UK customers in the three months to the end of June, compared with 620,000 the quarter before.

The slowdown reflected a fall in new pre-pay customers after an increase in prices.

UK customers, end-March
Vodafone
12.3 million
BT Cellnet
11.2 million
Orange
11 million
One2One
9 million
The cost of pre-pay packages had previously been kept very low as operators, particularly Orange, fought to win market share.

But the second quarter saw greater focusing of strategy on increasing revenue from existing subscribers rather than winning new ones.

Vodafone said pre-pay customers accounted for 56% of net new additions in the quarter, down from 74% in the previous three-month period.

At Orange, pre-pay deals were down to 73% of all new deals from 93% in the first quarter.

Fifth operator

Deutsche Telekom-owned One2One is the fourth-placed operator in the UK. It had about nine million customers at the end of the first quarter.

Pre-pay vs contract
Vodafone 8.1m vs 4.4m
Orange 8.5m vs 3.4m
The advent of third-generation mobile phone services - offering high-speed internet access, video and networked games - will see the arrival in the market of a fifth operator.

Hutchison 3G UK, which won a licence at auction last year, plans to launch services in mid-2002.

The group's shareholders include Hong Kong-based Hutchison Whampoa, Dutch telecoms group KPN and Japanese mobiles giant NTT DoCoMo.

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See also:

24 May 01 | Business
BT mulls Cellnet rebrand
04 Jul 01 | Business
Sony recalls 560,000 mobiles
02 Jul 01 | Business
BT 'to ditch Concert'
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BT hires demerger specialist
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BT Cellnet holds off Orange
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