UK rivals see contract gains and pre-paid losses during Q1 2010

Both UK operator Orange and Virgin Mobile, the country's leading MVNO, added new contract customers during the first quarter of 2010. But the contract gains at both operators during the first three months of the year were outnumbered by declines in the number of pre-paid users as a result of churn. The net effect was that both operators saw their total customer bases decline between end-December 2009 and end-March 2010.

Orange experienced a 220,000 gain in contract customers in the first three months of 2010. Some of the gain was attributed to sales of the Apple iPhone which Orange started to offer at the end of last year. Overall, the operator saw a net decline in its base of 71,000 since end-December 2009 because of the departure of pre-paid users.

However, Orange's total base has grown nearly 4 per cent to 16.4 million when measured on a year-on-year basis since the first quarter of 2009.

Meanwhile Virgin Mobile, which is owned by UK cable operator Virgin Mobile, gained 81,200 on the contract side during the first quarter. Pre-paid departures meant an overall loss of 114,900 customers since end-December 2009.

Many Europe mobile operators now pursue higher revenue-generating contract customers and put less emphasis on acquiring less lucrative pre-paid customers. For instance, Virgin Mobile admits it no longer focuses heavily on growing its pre-paid base. The reasons are the higher churn, lower tariffs and lifetime value of pre-paid users, it says.

Orange's revenues in the first quarter of 2010 grew by only 0.4 per cent to €1.24 billion compared to the first quarter of 2009. The company also confirmed the creation of a joint venture with T-Mobile UK on April 1 of this year. It is in the process of merging with its UK rival. Virgin Mobile's revenues were £131.9 in the first quarter, down 2.5 per cent on the same period last year.

For more on this story:
Mobile News

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Rumour mill: Orange/T-Mobile UK to build new network
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