UK Mobile Industry - Essay Example

In recent years however, the number of potential new customers have fallen drastically therefore customer base has become the most critical resource for mobile operators for sustained profitability. As the scope for acquiring first time users decreases, operators increasingly rely on luring customers who choose to switch networks while at the same time minimizing their own churn rates. The UK telecom market is one of the most dynamic and competitive market in the world. Mobile penetration rates hover around 76%, there are four players operating in the market vying for almost the entire UK population.

The key players besides Orange are: Vodafone: The global telecom giant is the largest company in Britain, in terms of market capitalization. It poses strong competition for Orange, as its market share of 25% is marginally less than that of Orange. Recent developments at Vodafone Plc, like the tie up with Google for introducing search and mapping services on phones should be especially taken note of by Orange. One2One: One2One forayed into the UK market in '93.It has a substantial market presence, as 20% of the total mobile users are One2One users.

In terms of network coverage, it has the lowest coverage among the four operators. A huge proportion of its subscribers are "pay as you go".Virgin: Although a separate service operator, Virgin uses the One2One network. It offers only "pay as you go" packages.Briefly, the characteristics of the UK telecom market are:1. UK mobile services prices are relatively cheap compared to other OECD countries.2. Consumer satisfaction levels with the key mobile players are high.3. Competetion based on quality is another characteristic of the UK mobile market.4. Penetration rate is 76% which indicates less scope for growth.

Challenges faced by mobile operators in UK.1. Formal regulation of the mobile sector is proposed to be reduced to minimum.2. Consumer awareness of different packages and tariffs remains low.3. Prices of "off net calls" between different networks and international roaming rates remain particularly high.4. Full benefits of mobile number portability are yet to be realized, as the practice of locking handsets to SIM cards inhibits the consumer's ability to switch networks.5. Massive investments in 3G services have been made but the prospect of return on investment remains uncertain.

OrangeThe largest of UK's four mobile operators, Orange UK has been a success story. It has defended the top slot in one of the most dynamic marketplaces of Europe, despite being the fourth entrant. The main drivers have been-clear and comprehensive pricing policies, attractive service plans and excellent customer service.Also, Orange UK is one of the most recognized brands in England possessing a lot of leverage.Product Range and Service PortfolioIn the voice services segment, two main types of services are available from Orange.

"Pay as you go" is a scheme in which no monthly rental or obligation has to paid, customers are only billed for their call