Orange tries to make the broadband market more contestable

Less than two months since its merger with Deutsche Telekom’s T-Mobile, Orange has made a strategic decision to allow BT to take over Orange’s fixed-line infrastructure and integrate it into it’s own network. Orange’s present broadband network reaches about 65 per cent of the population and the decision to use BT’s network is designed as a way to challenge the dominant providers in broadband in the UK.

The industry is an oligopoly with the leading three firms taking over seventy per cent of the market according to the latest data.

Market share in UK broadband

BT Retail 27%
Talk Talk 23%
Virgin Media 22%
Sky 13%
Orange 5%
O2 3%
Others 7%

Orange has invested hundreds of millions in building up a broadband network and installing equipment in local exchanges but they have opted to outsource the network provision to BT and focus instead on selling broadband services. Orange has nearly 30 million mobile phone customers in the UK after joining forces with T-Mobile, but has slipped behind in broadband with around 840,000 customers.