British Telecommunications Plc’s decision to try to wrest a little business from Mercury Communications Ltd in the cable television local telephone service market should be good for the cable companies, and even better for subscribers (CI No 2,241). Each company now offers a deal that leaves the cable operators with about 50% of the telephone revenue, where under the previous agreement, Mercury took about 70%. It is expected that most cable operators will keep the phone companies honest by signing up with both of them and favouring one or the other according to who gives the better deal on the route – already the Encom Cable TV & Telecommunications Ltd unit of BCE Inc has agreed interconnection deals with both British Telecom and Mercury to become one of the first London-based cable operators to connect to both networks – and BCE holds a 20% stake in Mercury. The other winners are likely to be telephone equipment companies as the locals start installing their own switches to ensure that they keep all the money from local calls rather than having to hand a switching fee to a phone company. The BCE unit, based in London’s Docklands area, said it was currently investing another UKP4m to install its first switch which will be launched in September. The switch will enhance features and services for customers. Nynex Corp’s Nynex Cable looks for better prices and better quality from the new regime, and plans to start switching its own calls from early next year. Franchises are beginning to provide telephony to customers outside their franchise areas. To do this they need to connect to the rest of the UK and the world. What we’ve signed is a basic agreement for any of them to interconnect, Nynex said. TeleWest Communications Group Ltd – the US West Inc-Tele-communications Inc – ordered its first switch – from Northern Telecom Ltd – in March (CI No 2,128), and plans to order several further ones. Figures from the Cable Television Association show that 186,135 cable telephone exchange lines were installed in the UK by the end of July, up from 170,178 at the end of June. Nynex reckons that it is worth putting in its own switch rather than paying interconnect charges once a cable system has signed from 7,000 to 8,000 telephony subscribers.
