Orange Personal produced another strong quarter of revenue growth. The pay monthly segment continued to lead the way with more than 160,000 customer additions in the quarter (up 11% year on year), taking the contract customer base above six million for the first time in Orange UK’s history; of these, one million customers have been added in last 18 months.
Q3 has seen customers increasingly signing up for long term, better value contracts, and migrate from pay as you go to pay monthly, taking the pay monthly mix up three percentage points to 38% of the total customer base. This trend supports Orange UK’s push into the better quality contract market with SIM only and low entry £15 tariffs.
Q3 Mobile base grew 2.7% year on year to 15.82 million with pay monthly 6.013 million and pay as you go 9.802 million. Average revenue per user is up 4.6% year on year to £273 (with data ARPU up 11%), meaning that customers are now spending on average £12 more a year than they were 12 months ago. UK Personal delivered more than 4.3 billion euros in revenue in the first nine months.
The new strategy to improve, grow, and evolve the business, announced by CEO Tom Alexander back in June, has also started to have effect on Orange Home Broadband, which demonstrated a 50% reduction in churn quarter on quarter, with customer numbers now at 1.023 million. Additionally, with a major overhaul of the fixed network announced in September, and the introduction of market leading broadband propositions such as the 8MB ‘free’ tariff for customers taking out a mobile contract, Orange now has a strong base to grow from going forward.
Network improvements were a major focus for Q3. With more than £1million being invested every day on the UK fixed and mobile network, Q3 saw the largest set of improvements to Orange’s fixed line broadband service to date. These include the expansion of the implementation of closer monitoring systems and LLU equipment, which have led to radically improved line stability, faster speeds and a more reliable service, as endorsed in September’s independent Moneysupermarket.com survey which ranked Orange in the top three on its broadband market speed test. These network improvements have been matched by changes in Orange’s broadband customer service, ensuring calls are now answered more quickly, and employees are empowered to deal with problems more effectively.
Orange UK LLU network expansion has taken the population coverage to 58%. The launch of the customer experience program is now having tangible effects on line improvements (the percentage of customers logging a fault on Orange LLU network reduced by more than five times over the last 12 months, with Orange access network now outperforming BT wholesale’s network in that area).
3G mobile broadband coverage has risen to 94% of the population, with 3G+ (HSDPA) access growing to more than 56% of UK population. There is strong commitment to further develop high speed mobile networks by the end of 2009: 14.4Mbps in top five UK cities; 7.3Mbps in top 30; and 2Mbps for 80% of population.
Data usage has been significant in Q3 with mobile network data traffic doubling from Q208 to Q308, with Orange UK seeing sustained data usage increases in Q3 as a result of sales of USB dongles to contract customers. This is underpinned by significant increases in the 3G mobile broadband customer base, up 86% with 1.3 million customers added year on year bringing the total to 2.9 million.
The steady growth in ARPU over the past seven quarters in part reflects the increased data usage with data revenues now representing 23.1% of network revenues. Data services contributed £745 million of revenue in the first nine months of the year.
Three new MVNO’s launched in Q3, ensuring healthy growth in non-Orange customer numbers to approximately 2.5 million. New vice president of service, Jackie O’Leary, joined from CarphoneWarehouse to take charge of Orange mobile and home broadband customer service strategy and teams.
Orange kicked off the rollout of 60 new prime location retail stores, with an additional 100 more to receive extensive refits, designed to enhance the shopping experience and improve customer service.
Further to Tom Alexander’s pledge to evolve the communications market, Orange introduced the first laptop in the ‘connected’ range, offering new ways for customers to connect with the people and things that matter most to them. Additionally, the company launched the new brand vision, Together We Can Do More, and a campaign reflecting the company’s transformation into one of the world’s leading providers of digital communications.