Atlantic Telecom to extend `wireless' telephone service

Atlantic Telecom, the fledgling operator of a "wireless" telephone service in Scotland, received a huge boost yesterday after the Government gave it approval in principle to extend its service throughout the rest of the country.

Shares in Atlantic shot up 13 per cent to 146.5p as the company announced plans to roll out the service in selected English and Welsh cities.

Meanwhile Ionica, which also operates a "wireless" telephone service but warned last week that growth would be held back by severe capacity constraints, saw its share tumble by a further 6p to 115p - less than a third of their value when the company floated in July.

Atlantic has picked up more than 10,000 customers since it began offering its service in Glasgow 11 months ago. Analysts now speculate that the company will start operations in the north of England, beginning with Newcastle, Leeds and Bradford.

The system works on the same fixed radio access principle as Ionica, with telephone calls beamed from a box on the side of the house to a local base station and then into the national network. But it uses a different part of the radio spectrum and different software developed in Israel.

Graham Duncan, chief executive of Atlantic, stressed that, unlike Ionica, it did not intend to roll out a universal nationwide service but rather target particular urban regions.

It also operates a novel tariff structure whereby customers in Glasgow can telephone anywhere in Scotland for the cost of a local call.

Mr Duncan said he expected to obtain the necessary licences next year and begin rolling out the service in areas outside Scotland in the second half of 1998. The company is capitalised at pounds 70m and analysts reckon it could raise up to pounds 100m in debt finance.