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Orange offers fixed-line service to UK businesses

No financial big bang expected, though

When most people think of the Orange brand they think of mobile phones, but Orange PLC hopes to change that perception – at least in the UK, where it will soon start offering landline services to small businesses.

Orange said today that its existing small to medium-sized business customers will be able to sign up for Orange fixed-line telephone services in the office and receive a single bill for their mobile and landline services. Customers will be able to call a single customer service line for help with mobile and fixed services, and they will receive discounted rates for calls between Orange landlines and Orange mobile phones.

Some customers are already trialling the service; the full commercial launch will happen in the second quarter, Orange said.

"We're seeing this as a stepping stone to becoming an integrated operator," said Jason Ellis, head of convergence for business solutions at Orange in the UK. Orange intends to offer additional services in the future, including broadband connectivity and VoIP (voice over IP), he said.

Orange won't sell the fixed-line offering without also selling a mobile service, Ellis said. "If you come for the fixed line, the assumption is you'll also get mobile," he explained.

Orange is initially targeting customers with as many as 250 users but in the future may broaden its offering to businesses with as many as 500 users, he said.

James Enck, European telecom analyst at Daiwa Securities, predicted that the initial voice-only offering is unlikely to make a major stir in the market. "It's the right thing to do, but I wouldn't expect any sort of big bang financially [for Orange], and probably the increased marketing expenditure will put pressure on it in the short term," he said.

With landline voice prices already quite low, customers would need a compelling reason to switch to Orange, Enck noted. Some customers might not see the benefit yet, because they will still have to use a different telecom supplier for broadband access.

But operators such as Orange must begin to offer bundled services as competition increases. BT, the incumbent operator in the UK, resells mobile services. Cable operator NTL has been in talks to purchase Virgin Mobile in the UK. And a wide variety of new types of companies are entering the telecoms space. For example, Tesco offers mobile phone services as well as VoIP in the UK.

Orange has said it is pursuing an integrated services strategy in Belgium, Spain and the UK, Ellis said. Orange is a unit of France Telecom, which offers a variety of fixed-line services in France.

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