Orange's Pellissier sees arrival of more converged services in UK

EE hinted that its plan to launch new TV services in the UK market is something of a defensive strategy against an expected increase in converged offerings from rival operators, with BT regarded as a particular threat.

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Gervais Pellissier, Orange's deputy CEO

Gervais Pellissier, the deputy CEO of France's Orange who has responsibility for the UK operator--a joint venture of Deutsche Telekom and Orange--said the pace of converged offerings is expected to pick up in the UK market, following the example of countries such as France and Spain where so-called quad-play offerings (mobile services plus fixed voice/TV/broadband in one bundle) are prevalent.

According to Reuters, Pellissier--who was speaking to journalists on the occasion of Orange's third-quarter results presentation--said EE is "positioning the different pieces to be a convergent operator, without, today, taking the next step, which is to do more by looking at potential combinations with fixed players."

By adding home TV to its service mix and moving closer to becoming a "quad-play" provider, EE would be better able to compete with existing pay-TV and broadband providers such as BT, Virgin Media and Sky as well as with rival mobile network operators.

EE competes with Vodafone, Three and O2 on the UK mobile market, but BT is widely expected to cause disruption once it launches a planned consumer mobile services.

BT already has a strong triple-play offering of fixed voice, broadband and TV services and plans to build a mobile network through a mix of femtocells, Wi-Fi access points and leased mobile network services from EE.

This so-called "inside out" approach to mobile networks plays on the idea that a high proportion of calls originate and terminate in the home. The EE network would then be used for services outside the home or Wi-Fi access point.

According to Rupert Wood from Analysys Mason, the approach offers real savings over classic MVNO models.

"As such we believe it could be successful, profitable, and disruptive to legacy mobile operators," Wood noted in a recent research report.

According to Reuters, UK operators are very concerned about the impact that BT might have on the UK mobile market.

"Everyone is terrified of what BT is going to do," an industry banker told Reuters last week. By undercutting prices "they could seriously do some damage," he said.

For more:
- see this Reuters article

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