Motor Show 1993: Paying the price for in-car telephones: Tony Bosworth investigates the mobile communications market
Wednesday 20 October 1993
The original mobile communication phone systems launched in 1985 were analogue cellular and they are still operated by Cellnet and Vodafone. These systems are aimed at the business user and costs are currently quite high at pounds 50 connection charge, pounds 25 monthly rental, peak calls at 25p a minute and off-peak at 10p per minute.
The advantage of this system is that all the transmitting infrastructure is in place and the system mostly works well, though in busier areas there can still be trouble getting a line, and the call quality is not as good as the newer digital systems. However, cellular is a truly national service, with the best UK coverage yet - some 98 per cent of the population could use a cellular phone today.
Following on from analogue has been the development of a digital network, currently operated by Vodafone - although Cellnet is to start a digital service soon. Vodafone offers MetroDigital and EuroDigital: the former a UK system which is essentially based around the area in which you live. This means that if you make a call from outside the pre-chosen area the call charges are higher.
To complicate matters further, users of MetroDigital can nominate the 'Home Cell', which can be any location you choose. If you opt for Home Cell, local calls from this specified location will be charged at 10p per minute, nationwide calls at 12.5p per minute during peak periods and 5p a minute during off-peak, as opposed to the normal tariff of 20p a minute for local calls and 25p a minute for national calls.
It is obvious this system will have to be simplified and streamlined because it is hard to see why users would want to choose a home-based 'Home Cell'. You might as well use your own BT phone at home and save the pounds 50 connection charge for MetroDigital and the monthly fee of pounds 20. The other problem is that users who dial a number in what Vodafone calls 'the provinces' - where the STD code is different from your own - the charge for calls can be a staggering 65p a minute peak rate.
EuroDigital, as its name suggests, is the European equivalent of MetroDigital, though the pricing structure is easier to understand, and for most mobile phone users who travel abroad from the UK it is probably a better option because it can be used here as well. You can use your MetroDigital phone abroad, but the charges are high. If you have a EuroDigital phone you pay a one-off pounds 50 connection fee, monthly rental of pounds 27.50 and 25p per minute peak call rate and 10p a minute off-peak.
For the future, the digital system has the best prospects because it is a standard which has been adopted by 35 countries and since it is digital it is secure and cannot easily be accessed by eavesdroppers.
Cellnet opens its full digital network early in 1994, initially based around London, Leeds, Manchester and Birmingham, and rolling out from there during the following 18 months to cover eventually 98 per cent of the UK population.
Cellnet have also reacted to changes in tariffs by introducing Citytime, which gives very competitive tariffs to those using mobile phones in London. Citytime has come about because of competition from the latest rival, Mercury.
Mercury Communications has added another element to the price war by offering free weekend and off-peak calls on their just-launched 'one2one' mobile system. This is not quite as good as it sounds, as off-peak means after 9pm Monday to Saturday, all day Sunday, and only applies to local calls.
Mercury offers two tariffs within 'one2one': BusinessCall and PersonalCall. The former has a monthly charge of pounds 20, peak calls at 16p a minute, off-peak at 8p per minute and calls between two 'one2one' phones also at 8p per minute. PersonalCall has a monthly charge of pounds 12.50, a peak call charge of 25p a minute, off-peak of 10p per minute, and then those local off-peak calls are free. Mercury's peak time is 7am to 7pm.
At the moment, 'one2one' only operates within the M25 boundaries. However, the system will be rolled out to cover more areas and by the end of 1994 it will cover a substantial part of the UK.
Mercury's system looks attractive on the face of it, but the cheapest phone is pounds 50 and even Mercury staff cannot get a discount. While Mercury uses a high-quality digital system it does not run on the same frequency as the other digital system, GSM. This is important because GSM is being adopted by an increasing number of countries and will eventually become the worldwide standard.
When GSM is working well, and Vodafone and Cellnet customers can benefit from it both here and across Europe, Mercury customers will not have the same benefits. The other option is to do nothing and wait for changes in the market, further reductions and refining of tariffs. So, if you can, wait until spring before buying a phone, because by then the sparks should really be flying.
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