Factiva

Monica Horten

When the Government announced the personal communications network (PCN) licences last year (to be launched in 1992), the facility was promoted by the licence contenders far too enthusiastically. It probably got so much attention because a pocket telephone that is cheap, affordable and may set new communication standards fires the imagination more than most other forms of telecommunications technology.

It is difficult to work out exactly what PCN will offer so far ahead of its actual arrival. At launch, it is likely to be similar to today's mobile telephone services.

The three licensed operators Mercury PCN, Unitel and the British Aerospace consortium indicate that they will be trying to win the same business as the mobile telephone operators. They are hoping to sell on their quality of service, and extras such as call-forwarding, which will be available soon after launch. But all admit that by 1992 we will not have reached the age of the truly pocket-size telephone, which can be programmed to let the owner know who is calling, yet be cheap enough to use as a home telephone.

First, the technical development and establishment of the nationwide PCN will take anything from two to five years. Second, the operators, to make PCN the mass-market product they want it to be, must change public understanding of how the telephone is used. Even enthusiasts agree that the mass market will not develop until the mid-1990s.

The family telephone is believed to be where PCN's potential lies. A PCN phone could be bought by parents for teenage children who would ideally use it to call home, and it would be comparable to other expensive presents such home computers.

To succeed in that aim, the operators will have to keep the price of the phones and the call charges low. All three network operators seem less confident than in the pre-licence run up on both counts. Figures of #100 to #150 for a phone were being bandied about.

Before the licences were announced, all three were confident that they would be pitching tariffs against the British Telecom telephone charges more or less immediately.

Now what they say is that tariffs will be lower than, but competitive with, Vodafone and Cellnet.

This picture fits in with the view expressed by Sir Bryan Carsberg, head of Oftel, the telecommunications watchdog body. He said after bids for licences were invited that PCNs were to be used as competition for the mobile phone operators.

Analyst Robert Kerr, of Laing and Cruickshank, says the only company which will make high profits out of PCNs will be Mercury Communications, because the PCN subsidiary will can use Mercury's nationwide terrestrial network, much of which is already in place. Mercury Personal Communications is run separately from the main Mercury operations.

This is reflected in the investment figures Mercury estimates it will have to spend #800 million, the BA consortium is looking at #1.2 billion and Unitel is thought to have a slightly higher figure. Oftel is believed to have been concerned that the high returns needed on that investment could mean rural areas might be ignored.

All three are required by the Department of Trade and Industry to meet and discuss the proposals for sharing investment in rural areas, so that no-one has to bear the load alone.

Technically, there will be no problem with a shared network, since all will be using the same standards, being worked out with the DTI.

However, the commercial reality of this kind of network-sharing is difficult It will be some time before the results are known.

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