Four months on from his announced intention to set up European partnerships in private access mobile radio, Callum Mackie is back in Britain launching a joint venture with a British licence holder and espousing market potential in the UK. A co-founder of Band Three Radio Ltd, the national UK private access radio licence holder, Mackie told our sister paper Telegram in November that he was seeking opportunities in regional operations on the continent, saying the potential for growth there was greater. Accordingly, last year he set up Opra Ltd, a consultancy for the private access radio industry. The plan was to offer his Band Three experience to French and German companies interested in bidding for regional licences – the French and German governments are just beginning to issue Private Access Mobile Radio licences. However Mackie admits that he has not been able to make any impact in France. He says he arrived too late in the licensing timetable to offer his services. In Germany, Opra has formed a joint venture with a German electronics firm, Berolina Electronic GmbH and a British mobile communications consultancy, Protocall Ventures Ltd. The company is called Regiocall GmbH and it has made bids in all five of the German regions, mostly urban areas and the results will become known on April 15. Mackie remains optimistic about the opportunities in Germany, although competition from the Deutsche Bundespost Telekom’s Chekker service is some cause for concern. Unlike in the UK, where British Telecommunications Plc was disqualified from bidding for the mobile radio licences, Germany’s closet corporatists have given Bundespost Telekom a head start and it has currently notched up about 1,000 subscribers in Berlin alone. Mackie believes that such a specialised market is not a business for PTTs adding that private companies should be able to compete fairly easily. But his concern is over cross-subsidising – the Bundespost Telekom could keep prices artifically low. And Mackie has based his business plan on higher prices than those currently charged by the state monopoly. The shape of the future industry will lie with the German regulatory authorities and whether an independent industry watchdog, such as the Office of Telecommunications, is created. One positive aspect to Chekker, says Mackie, is that it has shown the high level of German interest – On the continent, Private Access Mobile Radio is a high profile business. Around nine companies have bid for the German licences, submitting in all around 26 tenders across five regions. But in remarking on the seemingly higher level of interest in in the technology on the continent, Mackie is keen not to play down market potential in the UK. Opra has recently taken a 25% stake in Key Radio Ltd, which holds regional licences in four areas, Berwick, Carlisle, Guildford and Telford. The two companies have set up Expernet Plc, a management company for mobile radio networks. Expernet will offer licence holders help in operating and managing their networks and Opra is intending to use the company as a base from which to interest other regional licence holders.
Experience
The UK licensing environment is fairly relaxed compared with Germany. Here, Mackie reckons that companies are only required to submit two sides of paper, setting out their business plan. In Germany there are detailed financial and technical specifications to meet. But the Department of Trade & Industry does consider the plans quite carefully before granting a licence, as presumably do the companies submitting them. Mackie agrees, but maintains that even so, licence holders can often benefit from some help in managing the network. It’s such a specialised business…the experience of doing it is valuable. Expernet is also considering niche markets and future developments but for the moment these are secret. Although Britain is ahead of the rest of Europe in the setting up of mobile radio networks, the industry is often overlooked, as its more glamourous counterpart, cellular telephones, steal the limelight. Howeve
r Mackie believes the recession that is hitting the cellular market so hard could be the advantage of trunked private mobile radio. He says the estimated 20% churn rate from cellular radio provide customers looking for a cheaper alternative. I can’t believe that all those leaving the cellular networks are going bankrupt says Mackie, and if Private Access Radio picks up just 25% of that 20% churn, that’s 50,000 customers. – Sonya McGilchrist
