Mercury steps up mobile phone battle

PETER RODGERS

Business Editor

Mercury One-2-One, the cellular phone company, yesterday stepped up the battle for market share by bringing forward its plans for full national coverage.

The move came as its rival, Orange, which like Mercury One-2-One is an entirely digital service, prepares for a pounds 2.4bn flotation later this month on the back of a rapid increase in market share.

Richard Goswell, managing director of Mercury One-2-One, said the company planned to double its coverage to 80 per cent of the population by the end of this year, 90 per cent by the middle of next year and 95 per cent by December 1997.

Mercury has been trailing in the national stakes because of the narrowness of its coverage and the announcement brings forward and expands its investment programme.

The changes are bound to increase the pressure on the three other companies in the highly competitive cellular phone market - Orange, Vodafone and Cellnet - to improve tariffs still further.

There has been a succession of new tariffs announced over the last few months as the industry has fought for new customers.

Mercury said nothing about further tariff changes but admitted these were bound to come in the mobile market as competition continued. It is spending pounds 30m on an advertising and marketing campaign.

Mercury originally set its investment programme at pounds 895m with a target of 65 per per cent coverage of the population by the end of this year and 90 per cent by the end of 1997.

This has now been rolled forward about six months, and increased to pounds 970m to pay for an increase in the ultimate target coverage from 90 to 95 per cent.

Mr Goswell said Mercury had "successfuly outsold Orange in our coverage areas since we and they launched." He claimed 27 per cent of gross sales and 19 per cent of the market in these areas, though national figures for Mercury are much smaller, reflecting its poor coverage. "Our challenge is to take these good figures to the rest of the country" he said.

Mr Goswell denied the timing of Mercury's expansion announcement was anything to do with the flotation of Orange, whose prospectus was published on Tuesday.

Last year, Mercury agreed turnkey construction contracts with Ericsson and NorTel which had been designed to be flexible so they could be accelerated if necessary. "We have now confirmed we can achieve the new targets," he said. Mercury plans to launch in Manchester in April and had made the announcement so customers in the North could feel more confident about the service.

Mercury expects to announce that its customer numbers passed 400,000 in March, compared with 340,000 last September.

Orange is likely to argue as its flotation approaches that Mercury One- 2-One expansion is unlikely to damage its own prospects and will help to encourage mobile phone usage.

Both Mercury and Organge have moved away from the philosophy of the original two entrants to the market, Vodafone and Cellnet, which have used their tariffs to encourage low usage customers.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Joe Cocker performing on the Stravinski hall stage during the Montreux Jazz Festival, in Montreux, Switzerland in 2002
musicHe 'turned my song into an anthem', says former Beatle
News
Clarke Carlisle
sport
Sport
footballStoke City vs Chelsea match report
Arts and Entertainment
theatreThe US stars who've taken to UK panto, from Hasselhoff to Hall
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Life and Style
Approaching sale shopping in a smart way means that you’ll get the most out of your money
life + styleSales shopping tips and tricks from the experts
News
newsIt was due to be auctioned off for charity
News
Coca-Cola has become one of the largest companies in the world to push staff towards switching off their voicemails, in a move intended to streamline operations and boost productivity
peopleCoca-Cola staff urged to switch it off to boost productivity
Environment
Sir David Attenborough
environment... as well as a plant and a spider
Voices
'That's the legal bit done. Now on to the ceremony!'
voicesThe fight for marriage equality isn't over yet, says Siobhan Fenton
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

SThree: Graduate Recruitment Consultant

£20000 - £25000 per annum + OTE £35000: SThree: SThree are a global FTSE 250 b...

Day In a Page

Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'