Orange pre pay value for money?

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Gareth - 28 Jan 2006 20:01 GMT

I've just started using Orange pre pay via the free SIM card offer - I
didn't realise that there were 300 free texts to start with so I've lost
them but anyway...

Having just topped up with £10 in the first I received 3 text messages - the
first telling me that I have been given 1Mb of free Orange World access
(very useful for GPRS email downloads), 300 free text messages and over 500
free 7PM to midnight minutes to other Orange phones.

This sounds to me like very good value for money and probably far more
common sense than my £50 or so monthly Virgin bills (a lot of it taken up by
GPRS charges).

Anyway, what I don't understand is why it is possible to get such good pre
pay offers in comparison to contract offers with Orange. T-Mobile long ago
decided to shaft pre pay customers but with Orange it seems to be the
reverse - even with good cashback deals, as risky and as problem haunted as
they can be, it doesn't seem possible to get £30 worth of text messages a
month plus £5 worth of free GPRS plus free on network calls for £10.

Aside from mobile phone subsidies what are the benefits of contract for the,
in the main, GPRS/data call and SMS user?

Gareth.

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Sean - 28 Jan 2006 20:32 GMT

Just to let you know you can also pay £1 for unlimited access to GRPS
for a day.. :)

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Jon - 29 Jan 2006 10:42 GMT

hotmail.com@dgareth.spm declared for all the world to hear...

> Anyway, what I don't understand is why it is possible to get such good pre
> pay offers in comparison to contract offers with Orange.

ARPU from pre-pay users is generally much higher than contract users (no
£250 phone subsidies every 12 months), ergo they get looked after.

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Regards
Jon

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scoot - 29 Jan 2006 22:44 GMT

> hotmail.com@dgareth.spm declared for all the world to hear...
>> Anyway, what I don't understand is why it is possible to get such good pre
>> pay offers in comparison to contract offers with Orange.
>
> ARPU from pre-pay users is generally much higher than contract users (no
> £250 phone subsidies every 12 months), ergo they get looked after.

ARPU doesn't include upgrade costs, its just a simple measure of revenue
per user from incoming and outgoing calls and data charges. It would
still be much higher for contract users even if you did discount handset
upgrades(much cheaper than £250- no VAT and bulk buying benefits for a
start) and retention costs. Bare in mind many people dont upgrade every
year, and when they do they dont haggle and get the upgrade for free.

I think the real reason behind Oranges behavior here is that they are
trying to reduce pre-pay churn, which must have been a particular
problem for them.

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hairydog@despammed.com - 30 Jan 2006 18:36 GMT

>ARPU doesn't include upgrade costs

ARPU is a bloody stupid measure that tells you very little.

It is the average revenue, not the profit.

A customer who is on a contract and pays £5 per month but makes the
full inclusive call allowance and often calls OCS will probably bring
in no profit at all. A customer who is on a £25 per month contract but
makes no outgoing calls, has loads of incoming calls and never calls
OCS will be very profitable.

The trouble is that the bean-counters and the managers can't fathom
out a complicated measure, so they plump for an easy one instead.

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Iain
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