Orange launches 5m blitz as price war looms

Mobile phone operator Orange is preparing a 5m ad campaign through WCRS to promote its TalkShare scheme.

The campaign precedes what City analysts predict will be an imminent mobile phone price war.

According to company sources the ads will break in July on TV, press and posters to promote the scheme, which includes dual billing and handsets plus bundled minutes. It will be the company’s first advertising since Robert Fallow joined as marketing director from Reebok earlier this year.

But City analysts warn that price cuts will be triggered when rival operator One2One achieves 90 per cent coverage of the UK market, which is expected to happen in December. The One2One Diamond tariff package is cheaper than those of its rivals Orange, Cellnet and Vodafone, and once it has the coverage the others will have to cut prices.

“Marketing has expanded the market and now we need a cut in price, in hand with marketing, to expand it further,” says Hoare Govett telecoms analyst Jim McCafferty. “The mobile market is not as buoyant as it is in other markets like Sweden, where penetration is twice as high but prices are 40 per cent lower.”

McCafferty believes the operators could be forced to cut prices by between 15 and 20 per cent.

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