Orange launches £5 contract

A couple of weeks ago it was all Vodafone. This week it's already all about Orange.

I know it's nothing to do with mobile broadband, but headline-grabbing news #2 over the weekend was Orange UK's launch of a £5 3-year contract with 50 mins and 50 SMS. This recession-busting offer is the cheapest ever contract in the UK market. There are also new £10 (100 mins/300 SMS) and £15 (200 mins/unlimited SMS) options. This tells me two things. Firstly Orange is a little spooked by 3's £9 tariif and has felt the need to match (and indeed better) it. Secondly they're very worried about churn. Who wouldn't be. In a recessionary environment, inertia tends to evaporate. But is this really an option for contract customers? No, and they're already tied in. It's mostly a way to encourage prepay-contract migration.

Free handsets on the £5/£10/£15 plans are the Nokias 2630, 3600 and 6500 slider respectively. Subscribers will also get a free handset upgrade mid-way through the contract, although it'll hardly be in the interest of Orange to throw anything too expensive at these subscribers. It'll be interesting to see what devices these subs end up getting at the mid point. Seems a sensible way to clear stock of the 18m-old 6500 sliders which are gathering dust. Sales of mid tier devices (into which the 6500 fits v neatly) seem to have dried up a bit in the light of the recession. Orange probably have a lot to get rid of.