In many ways, it is the UK and not the US that is the test-bed for the technologies and the regulatory climate for the multimedia telecommunications world of the future – only in the UK can privately-held cable television companies – foreign-owned ones at that – offer local telephone service alongside access to Sky Television, Cable News Network and MTV. For all its calls for other countries to make their markets as open as the US, Washington protectionists still shamefully bar foreign companies competing on an equal footing with American-owned ones in telecommunications. Equally, the Personal Communications Services that America is gearing up to build originated in the UK – where they dreamed up by Plessey Co Plc in response to an invitation from the Department of Trade & Industry for companies to submit proposals for making use of some newly-liberated radio spectrum.

Dramatic

And while America prepares to auction the airwaves for Personal Communications Services, the world’s first Personal Communications Network is already in operation in the UK, run by Mercury Communications Ltd in partnership with US West Inc: it is called Mercury One-2-One, and at present looks very little different from any other cellular network. The world’s second Personal Communications Network is scheduled to open in April also in the UK: it is Hutchison Telecommunications (UK) Ltd’s Mircrotel. The impending Hutchison launch has had plenty of publicity and attracted a deal of press comment and discussion, but another launch, also pencilled in for April, has had almost no publicity – yet it is possibly an even more dramatic development. It is the launch of the National Grid Co’s Energis Com munications Ltd trunk telecommunications network. Energis potentially represents a bigger threat to British Telecommunications Plc than Mercury ever did – and represents a major threat to Mercury as well. Energis is of course the company that has been quietly investing UKP200m stringing fibre optic cables between the giant pylons that make up the National Grid, the network that its core electricity distribution business uses to supply the 12 regional English electricity marketing companies with their power – which is in turn of course generated mainly by PowerGen Plc and National Power Plc. Whyever should another trunk telephone network pose such a threat to the established order? Simply that the cost of building its network is so dramatically lower than it is for any operator that has to bury its cables. Once strung with fibre optic cable, the National Grid represents a complete ready-made trunk network that covers the country at a fraction the cost that Mercury’s network took to build.

Residential

Moreover, since it is owned by the 12 regional electricity companies, it has the only cheap means of access to residential customers outside the big cities: wherever the local electricity company delivers power to subscribers by overhead cable rather than by buried cable, the electricity poles and cables are already in place to take fibre optic cable right into the home which suggests that Energis should have the same obligation as British Telecom to offer phone service at the same price to any remote rural area that is currently supplied with mains electricity. Energis has even won itself a crucial advantage in London, where it has done a deal with London Transport that allows it to lay optical cables in all the underground railway tube – tunnels, making it the low-cost telecommunications supplier for large parts of the country. And City of London Telecommunications Ltd, 90%-owned by Fidelity Investments Ltd of Boston, which is well on its way to building a fibre Metropolitan Area Network for Greater London, having started in the City, has already signed interconnect agreements with Energis. And once again, open Britain looks likely to live up to its free market principles by allowing AT&T Co to take a large stake in Energis, making the company a truly formidable competitor for British Telecom. All telecommunications subscribers are likely to benefit from w

hat should be a dramatic increase in competition five and seven years out, and all the woe over job cuts at British Telecom will no doubt nowhere be countered by anybody talking up all the new jobs that will be created by Energis, not only directly as a result of the people required to operate and maintain and market its network and services, but also as a result of the low, low costs of telecommunications that should follow the company’s arrival on the market. Is there any way in which we as individuals can benefit from this stunning new business, apart from as telephone subscribers? Well yes, there is.

Stunning success As has already been mentioned, Energis is owned by the National Grid Co, which is in turn owned by the 12 regional electricity distribution companies, all of which are quoted on the London International Stock Exchange. The expectation is that they will want to float the National Grid Co as an independent company complete with its Energis business, and it is being suggested that it might be floated at a valuation of perhaps UKP4,000m, against the UKP2,200m at which the regional electricity companies collectively have it in their books. If the potential of Energis comes to be recognised over the next few months, the valuation placed on the National Grid Co could be even higher, and that could make the electricity companies – currently valued as fairly sleepy utilities, look decidedly undervalued. For the record, the Daily Mail has drawn up a list of the holdings, which show that Eastern Electricity Plc holds 12.5% of the National Grid Co, Southern Electricity Plc owns 11%, London Electricity Plc, 10.5%, Midlands Electricity Plc and Yorkshire Electricity Plc 9.2% each, East Midlands Electricity Plc 8.4%, Norweb Plc 8.2%, Seeboard Plc, 7.3%, Northern Electricity Plc, 6.5%, South Western Electricity Plc, 6.3%, Manweb Plc 5.5%, and South Wales Electricity Plc 5.4%. Some of the electricity companies – South Wales, Yorkshire, have been putting toes in the telecommunications and cable television water on their own account, but all, by virtue of their ownership, have an overriding interest in seeing the National Grid Co, and with it Energis, become a stunning success, which suggests that when it comes to really serious telecommunications competition, you ain’t seen nothing yet.