Money: There's nothing phoney about the challenge to BT: The future of Britain's telephone network is on the line. Andrew Bibby reports

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The Independent Online
Roz Hall's telephone number listed in the Bradford phone directory now rings unobtainable. Shortly before Christmas Ms Hall, a local government official, asked BT to disconnect her line and arranged to have her telephone service supplied by the local cable television company.

The switch, she hopes, will save her money - perhaps enough to cover the pounds 11-a-month cable TV subscription.

The growth in the number of people who, like Roz Hall, have switched from BT has surprised even the cable TV companies themselves. According to the trade body, the Cable Television Association, subscribers more than doubled during 1993 from 109,000 to an estimated 292,000. In some areas more are subscribing to cable telephones than to television, a curious reversal of the original aim of the experiment.

Roz Hall's company, Yorkshire Cable, says it can save money by routing her calls over either BT or Mercury circuits, depending on which is cheaper. Other cable firms have gone a step further. Last week the Canadian-owned Videotron announced that off-peak calls between its subscribers in the same area will be free from February.

Videotron's move at present affects calls between only about 27,000 telephone subscribers in its London franchise and 7,000 in the Southampton area, though it claims to be anticipating 1,000 new subscribers a week.

Diamond, the cable operator in Nottingham, already offers free off-peak calling within its network. It has about 9,000 telephone users compared with 6,000 who take its TV services.

In Roz Hall's area the cable phone rental of pounds 21.21 - with a small discount for TV subscribers - is only just below the BT level, but Yorkshire claims additional savings can be made on call charges and says some customers may get bills up to 20 per cent lower. 'Any comparison of charges is difficult as BT currently charge by the unit and we charge by the second,' says Martin Hickes, a company spokesman.

As the table shows, Yorkshire Cable is more expensive than Mercury for long distance calls, although Mercury users must first pay pounds 11.55 a year to subscribe. BT's recent tariff reduction makes it much better value than Yorkshire Cable at weekends.

One disadvantage of moving to cable is that the telephone number has to be changed. 'I wrote the new number on the Christmas cards I sent out, and I think I've managed to tell everyone,' says Roz Hall.

Cable telephone subscribers are listed in BT phone directories and their numbers are eventually available from directory inquiries, though Yorkshire Cable says that there can be a delay of up to six weeks. In Roz Hall's case her new number was still unobtainable from the BT operator this week.

Cable companies currently reach 2.5 million homes, and about one in five people choose to subscribe to TV or telephone. At present, therefore, cable offers little direct challenge to BT, which has more than 20 million lines.

Nevertheless, cable provides the first breach in BT's monopoly position at local level. 'There are a substantial number of people who clearly want a choice,' says Gary Davis of Diamond.

Cable firms in London plan to interconnect their telephone networks and similar networks are also under development in other regions.

Meanwhile, Mercury Communications is trying to promote its 132 service. Callers who have pre-registered and paid the annual pounds 11.25 subscription can make calls from their home number via Mercury without the need for the traditional blue button by prefixing their calls with 132. This service is available only from digital exchanges.

----------------------------------------------------------------- COST OF 5 MINUTE TELEPHONE CALLS ----------------------------------------------------------------- Yorks Cable (Bradford), Diamond (Nottingham) BT Mercury Yorks Diamond p p p p Local call, afternoon 16.8 - 17.0 15.75p Local call, evening 8.4 - 7.5 5.75 Call to London, afternoon 42.0 35.0 40.0 33.00 Call to London, evening 25.2 20.0 24.0 20.00 Call to London, weekend 16.8 12.5 24.0 12.50 All costs plus VAT. Ignores possible line installation charges. Mercury subscriber cost, quarterly BT/cable subscription charges. -----------------------------------------------------------------

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