Despite a hugely successful summer marketing campaign resulting in 1,000 residential customer signings each week, Mercury Communications Ltd admits that its market share is still only a drop in the ocean. The campaign was one of the few efforts that Mercury has made to attract residential customers – it has often been criticised for narrowly concentrating on the more lucrative business market. But in fact 70% of Mercury customers are domestic, with 30% business, although in revenue terms more like the reverse is probably true. Mercury now has 70,000 residential users, up from 50,000 at the start of the advertising. But that still leaves British Telecommunications Plc with around 18m residential customers and 7m business customers, confirming complaints that Mercury just cannot take on the might of Telecom all by itself. The Duopoly Review is widely expected to recommend more operators, something that both British Telecom and Mercury have opposed. Mercury chairman Peter Van Cuylenburg, has stated that he wants 1m customers by the mid-1990s, rising to 5m by the turn of the century. Even this would amount to only 20% of the overall market and Mercury appears to have accepted that other operators will have to help in the task of breaking down the monopoly. Van Cuylenburg says that he does not expect Mercury’s market share to rise much beyond that. Even the success of the marketing campaigns appears to have taken the company by suprise, with reports of capacity problems leading to delays in customer connection. However Mercury maintains that the problems are now cleared up and it is continuing to upgrade the network apace. This year, it is due to start trials of Synchronous Digital Hierachy technology to add extra capacity. The system switches traffic at higher bit rates, reducing bottlenecks and speeding up the network. Mercury estimates that under the new system, the speed of the network could increase fourfold, to 2.4Gbps from 565Mbps.
