Orange and NTL are negotiating a telecoms alliance.
France Telecom’s mobile subsidiary Orange and NTL, the UK-based cable company which is also 25%-owned by the French telco, have agreed to form an alliance. NTL will market a mobile telecoms service to its customers using Orange’s mobile network, while Orange will gain access to NTL’s fixed line network.
NTL has three million UK customers for its TV, fixed-line and Internet services. It is obviously more convenient for consumers to buy as many services as possible from a single source. In the utilities sector, such services have gained substantial popularity.
Following a mobile virtual network operator (MVNO) model, then, seems like a sensible move to NTL, leveraging its brand and customer base to move into a different market. The firm originally bid for a 3G license last year, intending to roll out its own UK mobile network. Moving into the MVNO space will allow it to return to this strategy without having to pay for licenses and network infrastructure.
From Orange’s point of view, the aim is to offer converged services – integrating mobile and fixed-line systems. Since 3G networks will not launch for some time, and even when they do they may be too slow to offer full multimedia content, an interim solution is vital. Allowing people to order a movie by mobile phone and have it delivered by fixed-line broadband could prove a very popular service.
In the longer term, the alliance might go further. One mooted solution to the bandwidth problems of 3G is to make greater use of faster, wireless local area networking. An opportunity certainly exists for NTL to cover hotspots over much of its network by implementing 802.11 technology. A consumer might be able to order content on their 3G mobile and then download it by wireless networking when they’re within range of an NTL wireless LAN.
Whether this happens or not, a deal is still a wise move for France Telecom, improving the synergies between its businesses and preparing them better for the broadband age.
