Orange is keen to follow O2's handset subsidy cuts

Operator concerned with pressure on prices in contract market...
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Orange has shown signs of becoming the second operator to shake up its pricing model, following O2’s move to cut subsidies on handsets last week.

Sources close to Orange have informed Mobile that boardroom discussions over subsidy cuts have taken place this week. Talks have been ongoing for some time, but the process was accelerated when it emerged that O2 had made the move last week.

One Orange source said: ‘We are seriously considering it. The economics of expensive handsets are making it tough.’

Orange is understood to be concerned by the number of expensive high-end handsets being released in Q4, and the increasing pressure on prices in the contract market.

O2 is offering the Nokia N95, Sony Ericsson C902 and Samsung Tocco for free on £75-per-month contracts, instead of £35.

Mobile spoke to the other three major networks, none of which said they were planning to make imminent changes.

source