Mercury may stop expansion

MERCURY Communications, the telephone company set up 10 years ago as rival to BT, may stop its nationwide expansion, disappointing government hopes that it would provide choice throughout the UK, writes Mary Fagan.

The company does not yet cover parts of the country including Cornwall, Wales and the north of Scotland and has not made significant inroads into local telephone services in the rest of Britain.

Mercury is reviewing its strategy under the guidance of Mike Harris, its chief executive. As a result, it may stop building its fibre optic network. Infrastructure has cost its parent, Cable & Wireless, about pounds 2.6bn so far. If Mercury stopped laying cables it could concentrate on providing services to businesses and wealthier domestic customers, on which it can make the greatest returns. Mercury would become a provider of sophisticated telephony and multimedia services rather than the ubiquitous alternative to BT envisaged by the Government. It hopes to begin to introduce home shopping and banking next year.

Strategy review, page 25