Orange HD Voice Represents a Longer-term USP with Short-term Question Marks

| Feb 16, 2010 | Consumer Services Europe | Analyst: Farah Jifri

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Event Summary

February 15, 2010 -- Orange announced that it is ramping up the rollout of mobile HD voice services in Europe to include France, Spain and Luxembourg. According to the operator, HD voice service will deliver significantly improved call quality. It has also confirmed that a three-month UK customer trial of mobile HD voice will start in Q2 2010. Orange also plans to add to its existing range of HD voice-compatible mobile handsets available in Europe. The announcement follows the commercial launch of HD voice services in Moldova in September 2009.

Analytical Summary

• Current Perspective: Neutral on Orange’s plan to extend HD voice to its key Western European markets, as this is an announcement with no immediate impact on the operator’s competitive position. It will take months, if not years, for Orange to achieve the HD voice penetration among its Signature device users sufficient to drive the kind of USP it has in mind, and the marketing value of HD voice is questionable.

• Vendor Importance: Moderate to Orange. As the first European operator to communicate pan-European plans for an HD voice rollout, Orange stakes a leadership position in a new – and potentially value-added – service. HD voice now becomes part of Orange´s strategy to create a differentiated, ‘quality’ proposition for its Signature customers.

• Market Impact: Low on the European mobile voice segment in the short term, because it will be several months before there is a critical mass of subscribers using HD voice for either the operator or end users to feel the benefit.

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Current Perspective

Competitive Positives and Concerns

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