You can spend the whole of the autumn flitting from one show to another if that’s your bag (likely it’s not, yours is the bag that was misrouted to Jakarta) and this week it’s the turn of the giant Comdex and the electric daylight-at-midnight of Las Vegas. The purity of Comdex as an MS-DOS event is about to be compromised by an incursion of Unix boxes – particularly from the new Sparc system builders anxious to make Unix a commodity item. As reported, we can expect to see CompuAdd Inc, Tatung Co, Trigem Inc, Research, Development & Innovations Inc, Goldstar Co and Twinhead Inc hawking their Sparc wares at the very least. And from down Mexico way comes LSI Logic Inc customer Intelecsis SA, a 250-employee $12m-a-year personal computer manufacturer that currently sells to the local Mexican market and exports to Colombia. The company is interested in expanding into other Latin American markets as well as Africa and Europe, and is hoping the Sparc will springboard it into these far reaches. At Comdex it will probably be showing a mid-range Sparcstation, a tower version with 100Mb hard drive, floppy and colour, according to design engineer Eric Romero. Prices are not yet set. Deliveries start in the first quarter of next year, with Intelecsis hoping to make 1,000 units during 1991. Cellnet Communications Ltd barred radio frequencies to Excell Communications Ltd last Wednesday, cutting off around 12,000 subscribers that bought their cellular service from the business, which went into receivership a couple of weeks ago (CI No 1,552). Three helplines have been set up by Cellnet for bewildered Excell customers who were put straight through to the network operator when they attempted to make calls. Subscribers have been given names and addresses of other service providers who have made special arrangements, so the subscribers do not have to pay to be re-connected to the network. Cellnet says that it has honoured its obligations under terms of its agreement with Excell, which states that Cellnet has the right to withdraw the licence if the company goes into receivership.
Protect Customers
Cellnet has not, however, taken up this option with Space-Tel Ltd, the London-based service provider which also went into receivership last month. It says that the reason for its action was to protect customers. Although acknowledging that Excell had continued to provide a normal service, Cellnet says that the receivership left customers wondering what was happening. Perhaps more pertinently, a spokesman added that there was no guarantee that we were going to get any money for people with phones using out network. Excell’s receivers have been negotiating to sell the business but they are now left with just over half the customer base around 13,000 Racal Vodafone customers. In the meanwhile it is continuing to provide a Vodafone service. Excell’s situation has been brought about by a combination of high interest rates, a declining economy that has hit car sales, and a highly competitive market. A couple of years ago subscribers were valued at around UKP900 each, but that figure has dropped as subscribers, realising the high cost of making calls, use the phones less. In theory, cellular providers were supposed to entice people onto the network with artifically low handset costs and then collect the money everytime someone made a call. In practice many subscribers have not paid up when the phenomenal phone bill arrived, others have ended up rarely using the service. Either way the service providers lose out. But the attractive theory enticed lots of firms onto the market, many backed by huge loans. Continuing high interest rates were the final straw for Excell’s backers Dialamotors, a holding company for the Dialaphone Group. Dialamotors borrowed UKP13m to buy Excell in June, but even a subscriber base of 25,000 was unable to generate enough profits to cover the interest on the debt. Metro Cellular, another Manchester-based service provider, dropped its call prices a couple of months ago. Metro’s chairman, Michael Goldstone said then that sel
ling handsets lower than cost was a flawed way to operate, and that it makes more business sense to drop call rates, even though handsets must go up because then at least, subscribers are more likely actually to use the service and pay the bills. Damien Callahagn at Cellnet says that over the next couple of years he expects the numbers of service providers to drop to around 15 from the current 50 through mergers and acquisitions – but by the time when Cellnet and Vodafone are allowed to sell their airtime directly in 1993 there may be even fewer.
