This means, for example, that a company that wants to change the way calls to its central freephone number are passed on to individual sites around the country would be able to plan, test and implement the changes directly on to Mercury's network rather than waiting for the telephone engineers to make the changes.
Businesses such as Pizza Hut that offer a home delivery service could have just one national number covering the whole of the UK. When a customer dials up to place an order, the intelligence in the network would recognise where the call was coming from and switch it through to the caller's local branch.
'In fact, the service could be cleverer than that - the call could be directed to the next nearest branch if the nearest one was closed,' says Alan Twite, Mercury's operations director.
In intelligent networks the software for controlling specific services is run on separate computers connected to the network switches rather than being integrated into the call-handling software in the switches. The switch communicates with the computer, which gives it instructions on how to handle calls.
This makes it easier and cheaper to offer new services since the software to run them does not have to be embedded in the switch. It also opens up the possibility that services could be provided by outside companies that are independent of the network operator.
Bellsouth, the US network operator, has already announced plans to create a programming language that could be used by anyone who wants to write their own applications. Bellsouth says many of its customers want to customise their phone networks and that it would not be profitable to do the software development itself.
Mercury will also offer generic intelligent network services. One of the first will be a 'follow-me' telephone numbering service, allowing people to use one number for all their incoming calls. The customer rings up the service to say he or she is going to be at another number. The intelligent network stores the new number in its database, and when someone calls the original number the switch refers to the database for instructions on how to reroute the call. Eventually, it will be possible to have follow-me services that will reroute a call to any number in the world.
Other services available on the intelligent network will include:
Call distribution - subscribers can have incoming calls routed to different destinations, for example circular distribution, percentage distribution or hierarchical distribution.
Conference calling - multiple callers can be connected in a single conversation.
Credit card calling - this allows a caller to charge a call automatically to his or her credit card.
Destination route calling - customers can have calls routed to different destinations depending on the time of day, day of the week, or origin of call.
Malicious call identification - calls can be tracked back to their point of origin.
Mass calling - each time a call is made to a particular number an announcement is transmitted and a log of the total calls is kept.
These intelligent network services are leading the way to the Holy Grail of telephony - Universal Personal Numbering - which will allow people to use a single personal number to access any service on any network anywhere in the world, and be contacted on that number on any fixed or mobile phone.
Outgoing calls will be billed to one account regardless of the network on which they originate.
Although it is not strictly necessary to have an intelligent network to offer universal personal numbering or any of the other services, some of which are already available, it reduces the cost.
The motivation for Mercury and others to invest in intelligent networks systems is that the profit from providing basic telephony services is declining as competition increases. At the same time networks are becoming so interconnected that it is growing difficult for the telecoms operators to distinguish themselves by the quality of service.
Mr Twite says: 'In effect there is now one global telephone network. Mercury's UK network has links to 340 other networks and we have to co-operate to avoid problems when there is a fault with one particular element.'
On 11 March GMTV offered viewers the chance to phone in and claim a free goodie bag. A Mercury user, the television company had 60 lines on which to accept the calls. The offer generated more than one million calls in an hour.
Alerted by the network management centre to the sudden surge in traffic, Mercury collaborated with BT to bar three out of four calls, preventing both networks from becoming gridlocked.
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