Centrica's woes are a money-spinner for Vodafone

One of the many unexpected misfortunes suffered last year by the old British Gas has turned into a huge money-spinning opportunity for Vodafone, the UK's largest mobile phone operator, it has emerged.

Plans to improve productivity from British Gas's 6,000 engineers who spend their time installing and servicing central heating boilers had to be put on hold as new communications technology failed to materialise on time.

Centrica, the gas supply business split off from British Gas in last month's landmark demerger, aimed to reduce staff numbers by equipping each engineer with a sophisticated lap-top computer complete with CD-Rom technology. Employees would log each completed job on their screen and send the information back to base using in-cab radio links, ending the time-consuming and expensive process of returning to base after each appointment to record the work on paper over a cup of coffee.

As customers subscribing to the "three-star" service contract will testify, the computers arrived on time. The radio technology, on the other hand, did not. Staff could impressively type each job on to their lap-top, but had no way of sending it back to base. To make matters worse, employees who had applied to take up British Gas's offer of voluntary redundancy had to be kept on to plug the gap.

By the autumn the problem had become so serious that Centrica took drastic action. It abandoned the idea of using beefed-up radio technology and placed an order with Vodafone for no less than 7,000 mobile telephones. Vodafone claimed yesterday that it was its biggest data communications order. A spokeswoman declined to put a figure on the deal, though it is thought to last for three years and depends partly on the number of calls made. The annual subscription enabling the 6,000 engineers to use the network is thought to be more than pounds 5m. Panasonic, the Japanese electronics giant, supplied the digital handsets.

Last week Roy Gardner, Centrica's chief executive, talked darkly of his frustration at last year's delays, which cost the company millions in lost efficiency gains, but pointed out that the productivity boost would come through sharply this year. The difficulties helped push the service business into losses of pounds 196m for 1996, only slightly down from the pounds 217m lost in 1995. Mr Gardner insisted his target of bringing the service division into profit by the end of next year still stood, despite the unexpected technology hiccup.

Comments