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Slow handset sales hit Orange growth

Full range of handsets needed for take-off

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ComputerWire: IT Industry Intelligence

Mobile phone operator Orange SA has confirmed that it will miss its target of 15% revenue growth this year and instead is aiming at sales around the 17bn euro ($16.7bn) mark, an increase of 12.7% on last year's level.

The mobile arm of France Telecom SA warned last month that while revenue from its network is on target, handset sales are below expectations. It released figures yesterday showing that while network revenue showed a 15.4% growth in the nine months to September 30, when equipment sales are included the growth rate slowed to a 12.8% rise to 12.5bn ($12.3bn).

Orange has been hit by the slower than expected arrival of handsets with color screens and cameras. Even though it has just launched the first Windows Smartphone onto the European market, handset sales are not expected to take off until there is a full range of models on the market.

In common with its peers, Orange sees great potential for growth as new services such as picture messaging, email and instant messaging services are introduced. For the moment, its ARPU figures are scarcely encouraging, with the annual figure in France shrinking 3.7% to 380 euros ($372.4) while in the UK it grew by 3.2% to 258 pounds ($400).

With a huge hole appearing in its European coverage with the financial problems at MobilCom in Germany, Orange faces an uncertain future, and its shares fell 5.4% to 5.96 euros on the figures.

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