Cutting Room: Opportunist Orange in age of austerity?


So Everything Everywhere has announced its pricing for the Apple iPad. £200 for an iPad sounds good, right? Well, let us consider the real cost of ownership

For a 16GB iPad a two-year deal, the total cost is £799 for existing Orange/T-Mobile customers and £847 for new signatories.

The price goes up to £849 and £949 for Orange customers taking 32GB and 64GB models, and to £897 and £997 to non-Orange customers joining the network for an iPad.

For a SIM-free iPad, the fee is £529, £599 or £699, depending on the internal memory of the device. The theoretic cost of the two-year data deal with the device is £600. So, the hardware comes at a premium of £250-£318, according to the model and your relationship with Orange/T-Mobile. Or, if you believe the marketing, it comes at a discount of £199-£350.

But is the 1GB-anytime/1GB-quiet-time data allowance attached worth £25 per month? Well, Orange is offering exactly the same allowance on a Dolphin deal for £15 per month over the course of a year.

So, the iPad data pricing is £240 more expensive over the contract term. Which means the hardware is on Orange’s special iPad tariff comes at a maximum saving of £110, or a premium of £41, according to hardware criteria. Except the Dolphin deal is for a regular SIM, and not an iPad-style microSIM. So forget that in practice.

If we look at data pricing from Three, say, then users can get a 1GB allowance for £7.50 per month. With a microSIM. Or 10GB of data, 10 times the Orange iPad allowance, for £15 per month, which is £10 per month and £240 per contract less than Orange is offering.

And so, Orange’s rates are like interest charges for an item on finance. If we take the tariff from Three, then it is APR of 5.9 per cent. Not bad for a two-year loan. But it is not a way to a cheap iPad either. But, then, the Xbox/Kinect bundle from O2 works the same line.

Which also makes curious O2’s refusal to engage in this iPad Christmas subsidy battle. One wonders if its acquisition budget has been blown already.

Interestingly, Three is about to announce its pricing for the iPad. And considering its original press release bore the same Apple-stamp as Orange’s, its fees will likely be similar.

Which undermines its own prepay microSIM offers.