Orange drops Ericsson and Siemens handsets

OXFORD, United Kingdom—In what appears to have been a politically motivated decision, the France Telecom-owned mobile operator Orange has dropped handsets developed by Ericsson and Siemens while retaining cell phones manufactured by French-based Alcatel and Sagem.
Orange claims that this move to drop two of Europe’s largest cell phone makers while keeping two French-government-supported firms, was part of its strategy to cut the number of handset providers it had contracts with from 12 to six. The company said it its consolidating its handset-buying policy as part of a cost-cutting drive that is expected to save more than 800 million euros (US$709.12) million per year by 2003. Orange confirmed that it would now be offering cell phones developed by Alcatel, Motorola, Nokia, Sagem, Samsung and Sony, although it conceded that an unspecified percentage of products may still be ordered from other noncontract manufacturers, and that the catalogue of providers could change again in the future.
In April, Orange awarded 3G infrastructure contracts to Alcatel, Ericsson and Nokia, which was seen within the industry as France Telecom being ‘persuaded’ to boost Alcatel’s chances of becoming a meaningful player in the 3G arena. However, since this decision Alcatel has only managed to win two other 3G contracts, while Ericsson and Nokia have been awarded 34 and 25 infrastructure deals respectively. Outsiders point to Alcatel being handicapped in 3G development by its lack of expertise in CDMA technology.