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August 18, 1988


By CBR Staff Writer

British Telecommunications Plc yesterday again voiced its determination to introduce charges for its directory enquiries service but would not name a date or pricing structure. Speaking at Telecom’s first quarter results meeting Graeme Odgers group managing director said that the company bears an annual cost of UKP150m in providing the service, with each enquiry costing an average 30 pence. Oftel has decreed that any profit reaped from the future operation will not be allowed to swell Telecom’s net income but must be used to reduce costs elsewhere along the line. The phone company is anxious to balance the cost of service provision against pricing as soon as possible for fear that opening markets will invite competitors to cream-skim where Telecom is currently over-pricing. Telecom nonetheless announced a satisfactory start to the year with results up to 30 June showing turnover up 10.5% to UKP2,632m compared to the equivalent period last year and pre-tax profits jumping 7.4% to UKP610m. The improvement in performance is distorted by the fact that the period with which it is being compared was hit by the aftermath of the bout of industrial inaction by employees. But Odgers pointed out that productivity increased sufficently to offset the effect of the price freeze imposed by Oftel which covers half the services in its basket. Odgers was particularly encouraged by increasing call volumes which rose by 14% in the international sector. The company is not so optimistic about maintaining its high levels of international business generally – profits grew by 27% last year – as the international economy is flattening from its previous buoyancy of the past two years. No quarterly breakdown was provided for Telecom’s International business or special enterprises, which includes Cellnet, and the company would not comment on its cellular activity beyond saying that Cellnet became profitable last year. Quality of service was vastly improved, claims the company and it is gearing up to introduce a new compensation scheme next March, which will entail it paying customers a UKP5-a-day penalty for every day delayed for an installation or repair. Odgers admitted that the biggest problem currently facing the company is the local end of the public network where lack of capacity is causing problems, but it expects the bottleneck to be resolved by the end of next year.

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