Orange France does u-turn over SIM-only deals

Having seen the success of SIM-only deals for other operators, France Telecom Orange has reversed its aggressive stance to the marketing concept and is now offering its first deal in France, having already been forced to introduce it in the UK to combat the success being achieved by O2. However, the offer has been packaged to appeal to environmentally-friendly consumers by claiming that SIM-only is "greener" because there is no need for a new handset.

The 12-month, no-handset Orange France package also offers €40 in cash to any customer who retains their old phone for a further year, while Orange donates another €5 to the World Wildlife Fund. However, the scheme has a catch by being limited to those with at least 1,500 points under the Orange loyalty programme.

However, O2 UK, which has pushed SIM-only deals the hardest, has stepped up the challenge by offering €11 rolling contracts, available online only. This undercut 3UK, Vodafone and Virgin Mobile and illustrates the popularity of SIM-only deals, which are said to be accounting for 30 to 35 per cent of new UK sign-ups in the current quarter. O2's Simplicity non-handset tariff represented about 25 per cent of new customer deals and over 10 per cent of its postpaid customer base in Q4/08.

SIM-only deals are also attractive to operators burdened with high handset subsidies, especially when targeting the lower income or credit-crunched customer bases. Equally, the success of SIM-only offers is hurting handset vendors as they struggle against a worldwide down-turn in order volumes.

Evidence of the success of SIM-only comes from market analyst firm GfK which recently stated sales of SIM-only deals had soared more than 95 per cent between January 2008 and January 2009. It said 143,000 SIM-only subscriptions had been signed by Jan. 31, of which 62 per cent were sub-£20 monthly deals.

For more on this story:
Ovum and Rethink-Wireless

Related stories:
Operators in price war with SIM-only offers
SIM-only and iPhone boost O2 subscriber numbers
Orange targets business users with SIM-only offer 
T-Mobile goes aggressive--mimics winners' tactics

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