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Friday, July 2, 1999 Published at 12:17 GMT 13:17 UK

Business: The Company File

Britain mad about mobiles

More than a quarter of the population now own a mobile

The astonishing growth in the UK mobile phone market is reflected in new figures released by two of the four main networks.

Orange said 430,000 new customers had signed up to its service in the second quarter of the year, outstripping market forecasts by 45,000.

And One 2 One has taken on 400,000 new subscribers during the quarter, an increase of 150% on the figure for the same period last year.

Telecoms analyst David Clevely: Can the market continue to grow?
The statistics mean a mobile phone is sold in the UK every four seconds. Nearly 17m people now own them - more than a quarter of the population. And some analysts expect that figure to double over the next year or so.

"It's fair to say mobile has gone mass market in Britain," one analyst said.

[ image: The company says the future is even brighter]
The company says the future is even brighter
Shares in Orange jumped on news of its figures. Although it made its first profit only last year, Orange has grown rapidly and in February announced plans to create 2,000 jobs over two years as the market grows.

It is Britain's third biggest mobile telephone company and now has 2.9m customers

Bosses have promised it will be the first British cellphone group to develop integrated data, Internet and electronic commerce capability.

Net service idea

Orange said that in the fourth quarter it would launch an Internet Service Provider, provisionally called Orange World.

It also plans to start marketing a handset with Internet access, made by Finnish manufacturer Nokia at the same time and boost data speeds over its network.

Managing director Hans Snook said: "The wire-free future started with voice. We are now extending it to data, Internet and e-commerce services."

Other planned services include videophones, with a commercial launch due in the first quarter of next year.

One 2 One, which is owned by Cable and Wireless and Media One Group, now has 2.7m customers - nearly twice as many as it had a year ago.

It has been put up for sale and is expected to fetch some £10bn.

Aggressive pricing strategy

One 2 One is the smallest of the four, but has adopted an aggressive pricing policy. Earlier this year it announced it was cutting its call charges by two-thirds.

[ image: Fierce competition has brought call charges down]
Fierce competition has brought call charges down
This made some calls cheaper than using BT, and One 2 One admitted that it was targeting the telecommunications giant's customers rather than rival mobile users.

What is interesting about One 2 One's latest figures is the continued expansion in the pre-pay market. This involves customers buying handsets and paying for calls in advance through vouchers.

These sales made up 70% of One 2 One's new customers in the last quarter and now represent nearly half of all its subscribers.

However, this evidence of a hugely buoyant market comes as the regulator, Oftel, announced more measures to ensure customers get the best deal.

[ image: Vodafone and BT Cellnet face a competition probe]
Vodafone and BT Cellnet face a competition probe
It will be launching a formal investigation into whether the two big players, Vodafone and BT Cellnet, have been acting anti-competitively.

David Edmonds, Director General of Telecommunications, said: "Competition in the mobile market has driven down prices and led to a huge growth in services for consumers.

"The issue that Oftel has addressed is whether competition is sufficient enough to deliver the best deals for consumers in terms of choice, quality and value for money.

"Our view is that at the moment, it is not," he added.

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