Cable & Wireless Plc was last week granted a provisional licence to operate a digital mobile personal communications network, in the 1.7GHz to 2.3GHz band, in effective competition with the two cellular systems in the UK. A delighted Mercury Communications Ltd said that the Department of Trade & Industry’s decision was the single most important occasion for the company since it was given its original licence to compete with British Telecommunications Plc. Mercury wants to set up the network within two years, and claims the services it will now be able to provide should allow it take a 25% share of the entire UK telephone market by the mid-1990s. It expects to be flooded with applications from companies wanting to join a consortium to launch the service, which it expects to be pitched between cellular and telepoint in price. The Department of Trade & Industry’s decision, subject to an acceptable proposal being delivered by September 14 1989, aims to let Mercury provide a full range of telecommunications services to compete with British Telecom. Speaking in the House of Lords, Secretary of State Lord Young said that Mercury’s ability to compete fully with British Telecom has been limited by its inability to provide a mobile network. The Department’s move comes is a result of the responses to its Phones on the Move discussion document; it has issued guides to other prospective personal communications network operators, who will be identified by the end of the year. One or two will be given licences, but Cellnet and Vodafone are ineligible. The Department believes that the new networks should operate to a common technical standard, but has left the issue open, saying that applications can be based on either the pan-European digital cellular radio system, Groupe Speciale Mobile, or the Digital European Cordless Telephone, DECT. Applicants can even lay out separate proposals based on each standard; the selected common standard will be announced only when the choice of operator has been made. The four consortia that will launch Telepoint services this year are insisting that the Department’s move represents no threat to their services. The government expects two-way personal communications nets to be more expensive and sophisticated than Telepoint, offering such services as portable facsimile communications, and leading to the creation of telecommunications systems that eliminate fixed cabling.
