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Wednesday, August 4, 1999 Published at 14:21 GMT 15:21 UK

Business: The Company File

Orange subscribers soar

Mobile phone use is growing rapidly in the UK

The rapidly growing popularity of mobile phones in the UK has led to Orange adding 800,000 new customers during the first six months of 1999.

This growth was three times faster than the year before, with the company predicting that more than one in three UK residents would own a mobile phone by the end of the year.

Within a further year that figure would become one in two, it added.

Chief executive Hans Snook said that with a further 181,000 signed up in July Orange now has 3.14 million customers in the UK.

[ image: After years of suspicion the UK has suddenly warmed to the mobile]
After years of suspicion the UK has suddenly warmed to the mobile
The rapid growth in the UK mobile market over the past year has been fuelled by cheaper prices and new pre-paid deals.

A further 6.5% of the UK population got themselves a mobile in the six months to June 30, taking ownership of mobile phones by the UK population to 28.8%.

Wirefree plans

The increase in sales helped Orange move into profit on UK operations for the first time during the second quarter of 1999.

Orange also plans to launch data and internet services in the UK this autumn, with other developments including the launch of a mobile video phone.

"We look forward to continued rapid growth in the second half of this year and to extending Orange's leadership in network, services, customer service and value," said Mr Snook.

Attacked rivals

Orange, the youngest and third biggest of the UK's four mobile phone networks, increased sales by 52% to £812.8m from £534.4m. It now has 17.6% of the UK market.

"It's only a very small UK profit (£3m) but it is the turning point which is significant, and we would expect that momentum to continue to build," said finance director Graham Howe.

Orange expects more than 35% of people in the UK to own mobile phones by the end of the year, with the figure rising to 50% by 2000/01.

But to help fuel fresh sales, Orange urged its three rivals Vodafone AirTouch, BT Cellnet and One2One, to take responsibility for the way in which third parties, such as supermarkets, are selling their handsets.

Mr Snook told a news conference that Orange would shake up the fastest-growing part of the mobile phone sector - the pre-pay market where customers pay in advance for call minutes - in the last three months of this year.

Gathering dust

He did not give details but accused rivals of allowing customers to be misled into believing they were getting cheap mobile phone deals from third parties only to find the true cost disguised in the small print.

At issue is a large number of cellphones bought and left to gather dust in drawers once consumers realise their cost - a number put by Orange at around 30%.

The company has operations in Belgium, Switzerland and Austria and has franchised its brand to Hong Kong, Israel and Australia and is seeking a licence in the Czech Republic.

The group said it hopes to seal a deal within 12 months to lease capacity from European utility firms such as Viag, RWE and Veba in Germany and Bouygues in France.

The group, still absorbing hefty start up costs, announced a pre-tax loss before exceptional items of £32.2m, down from a £49.3m deficit in the same period last year, and better than expectations.

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