22 January 2003
ORANGE RESPONDS TO COMPETITION COMMISSION REPORT
London: Wednesday 22 January, 2003: Orange notes the report of the Competition
Commission published today into termination charges for calls to mobile phones.
Orange notes that the Competition Commission confirms that the mobile industry
overall is highly competitive, has created substantial benefit for customers and
for the UK economy, is not yet earning an adequate return on capital, and faces
considerable future investment in networks and services. Orange asks,
therefore, why the Commission believes intervention is needed at all, especially
when the result will be to the detriment of mobile customers.
The Commission requires an accelerated reduction in mobile call termination
charges, which should lead to lower prices for fixed line customers, but says
that this should be offset by effective price increases to mobile customers.
Orange notes that the Competition Commission makes no provision to ensure that
the reduction in termination charges is actually passed on to fixed line
customers by BT nor, if it is passed on, will reduce fixed to mobile call rates
alone, rather than be used to subsidise other fixed line services to the
detriment of fair competition. Orange observes that BT retains a dominant
market share of fixed line calls; but is no longer regulated on the charges it
levies for originating fixed line to mobile calls.
Orange further notes that the Competition Commission has:
- chosen to ignore the mobile industry's £24 billion investment in 3G licences in its model of the
- excluded consideration of termination charges for calls to 3G networks
- ignored how its recommendations should be squared with either the changes in European regulation planned from this
July or the fact that OFTEL, the regulatory body charged with overseeing the report's implementation, will
cease to exist also from this July and will be superseded by the new OFCOM.
John Allwood, Executive Vice-President of Orange UK, said:
'This is an odd report. The Competition Commission recognises that the
mobile industry is highly competitive, has produced substantial benefit and is
not yet adequately profitable; yet it recommends interference. The
interference it directs would produce no net consumer benefit, since the
Commission envisages mobile operators putting up prices to offset lost
revenues. At the same time, the Commission has failed to ensure the fall in
fixed to mobile call costs would in fact flow through to the benefit of the
fixed line customer. It has also failed to specify how its directives will
work given the changes in regulatory structures in both the UK and Europe.
'The consequence is that Orange will have to implement the Commission's
directives, minimising the adverse impact on our customers and trading
partners, and ensuring that the charges are financially neutral for Orange. At
the same time, we are considering requesting a judicial review to ensure that
the Commission's report does not unfairly penalise mobile customers.'
Notes to Editors
- Orange, wirefree and any other Orange product or service referred to in this release are trademarks of Orange.
- Orange provides a broad range of personal communications services, including Orange GSM 1800 services and other
digital cellular telephone services.
- In August 2000 Orange plc was acquired by France Telecom, leading to the creation of one of Europe's
leading mobile operators. The new Orange has operations in 21 countries across Europe and beyond.
- As at the end of September 2002, Orange had over 13.1 million customers in the UK, 18.8 million in France and
approximately 43.2 million controlled customers worldwide.
- In May 2002, the fifth annual J.D. Power and Associates UK Mobile Customer Satisfaction Study showed that Orange
ranks as the number one telephone service for customer satisfaction in the contract sector.
- In September 2002 Orange UK won the Mobile Choice consumer award for Best Network. Mobile Choice said 'The
majority of Orange customers were more than satisfied with the service from the UK's biggest network.
Orange received glowing accolades for every aspect of its service - coverage , reliability, customer service
- Orange UK provides high quality coverage to 99% of the UK population and over 80% of the geographic area.
Coverage is based on hand portable, unlike some other operators which choose to base their coverage on boosted
- Orange UK now offers roaming in 126 countries on 282 networks.
- Information about Orange can be found on the Orange website at www.orange.co.uk and media information can be
found at www.orange.com
For more information call the Orange media centre on 07973 201 911
This information is provided by RNS
The company news service from the London Stock Exchange