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January 18, 1988

“INAPPROPRIATE” AT&T 5ESS SWITCH A WAS FACTOR IN BRITISH TELECOM’s CENTREX DELAY

By CBR Staff Writer

A key factor in British Telecom’s decision to delay introduction of its planned Centrex service (CI No 847) was the unsuitability of the AT&T & Philips Telecommunications BV Number 5ESS public switch, reports today’s issue of our sister paper Telegram. The paper reports that an AT&T delegate sent to a Centrex conference in London last week said that British Telecom had rejected the US exchange and that the UK company is now negotiating with European switch vendors. British Telecom’s plans to run a pilot Centrex service in the City of London in August of 1987 have suffered considerable delay and the latest date of January 1988 has been put back indefinitely. We discovered that the product we were to offer was not suitable for the market we were aiming at, says Telecom’s marketing manager for business exchange services Bonnie Ralph. Centrex needs in Europe will develop differently from Centrex in the US. We expect the hybrid market for Centrex services run in conjunction with existing PABX networks to be much more important in Europe than it is in the US. The company’s start-date has now slipped back to ‘sometime after April 1988’ when it hopes to be able to make its plans clear to multinational organisations in Europe. Meanwhile British Telecom’s fledgling competitor Mercury Communications Ltd is planning to extend its 2110 Centrex service in London, based on the Northern Telecom DMS-100 exchange, which is more widely used for Centrex, to North America.

The company is also discussing transatlantic links to US Centrex customers. But one multinational, British Petroleum Ltd, claims that a Mercury Centrex network can cost up to 200% more than a PABX network. In a case study comparison of a two-site PABX implementation against Mercury’s 2110 service presented at the same conference consultant at Butler Cox and Partners Janet Cohen, Mercury’s service was shown to be 50% more expensive than the PABX network. The success of the service in the US has depended largely on the pricing policy adopted by the Bell Operating Companies to ensure that it is a competitive alternative to PABX-based networks. Mercury, like its rival, recognises the importance of being able to transfer PABX-type features across the public network in the UK and has announced that it intends to phase in support for the UK DPNSS PABX signalling protocol on its 2110 Centrex service, as well as support for switched data in 1988. Discussions are now underway between Mercury and the UK PABX manufacturers to ensure that Mercury’s Centrex service is compatible with existing PABX networks, says Robert Davis, Mercury’s marketing manager for directly connected or 2100 services.

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