Orange breaks Vodafone's government monopoly

Orange has been has been named as a preferred mobile supplier to government bringing an end to Vodafone's two-year virtual monopoly and giving it direct access to a market of up to 500,000 phone users for the first time.

Both mobile operators have been selected as part of the Government Telecommunications framework agreement which runs until 2005 and enables civil servants working in the public sector to 'bulk buy' mobile phone handsets.

The public sector, including the National Health Service, can buy from other operators but only through the framework will they get "access to keen pricing", a spokesman for the Office of Government Commerce explained.

In practice this means that most of the UK's 500,000 civil servants will either be using Vodafone or Orange phones.

"Our remit is to open up government wherever possible. It's felt that competition is a healthy thing and an issue of personal choice," the spokesman added.

Orange hailed the decision as a victory and a blow to Vodafone. Richard Hanscott, VP of business solutions, said: "This contract is a significant one for Orange proving we have the products and services to win major contracts in the business space."

Today's announcement brings to an end an exclusive agreement between the government and Vodafone which began in August 2002. In that time 240,000 handsets were sold.

Vodafone put a brave face on the government's decision. A spokeswoman told silicon.com. "The [original] agreement was never as black and white as it seemed as people were always able to buy non-Vodafone phones. The government is still a very exciting and growing business for us."

A third supplier, Page One Communications, will provide pagers to the public sector.