O2 loses 3 roaming deal to Orange
UK cellco O2 today lost its national roaming contract with Hutchison’s 3G player, 3.
After what appears to be a closely fought auction process, Orange emerged as the winner, tendering the most competitive bid for the supply of voice, text and data services.
Orange will take its place as the preferred national roaming provider for 3 from the end of 2006, replacing O2, which held the position since 3 won its license in 2000.
The terms of the agreement were not disclosed, but speculation suggests that the contract could be worth up to ВЈ100m a year for Orange.
But an O2 spokesman played down the potential revenue loss. “Since that figure was bandied about in 2000, 3 has built up its network. You also have to bear in mind that a majority of its customers live and work in city areas [with 3G coverage], so the actual figure is some way far south of that estimate.”
The spokesman added that it was too early to say whether the absence of roaming revenues from 3 UK would have any significant impact on future O2 revenue reports.
“We’re keen to win business, but not at any cost. The price at the end of the day did not make commercial sense to us,” he said.
At present, the 3 network provides coverage for voice, text and data services to 88 per cent of the UK population – the new agreement with Orange helps 3 to deliver 99 per cent coverage for voice and text services.
Following the transition phase existing 3 customers’ handsets will select the Orange network in preference to O2 around year-end, although they will still be able to roam onto O2. Going forward into 2007 all new customers will only roam onto the Orange network.
Bob Fuller, chief executive at 3 UK said: “It was important we had a competitive tender and I am delighted with the outcome of the process.”
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Tags: 3, 3G, O2, Orange, Regional, UK