The UK’s only surviving Telepoint service will launch on May 21, when Hutchison Whampoa Ltd’s Hutchison Personal Communication says that its Rabbit service will go into action – not in London, which is usually blessed or cursed with such services first, but in Greater Manchester. The service will then be rolled out in the Granada Television region from 29 June, and the company has said that it intends to have most major towns and cities covered by October when over 12,000 base stations will be operational. Later these will be supplemented with a further 3,000 stations positioned according to customer demand.
The company remains optimistic about its chances for the service, despite the fact that the other groups granted Telepoint licences – British Telecommunications Plc, Mercury Commmunications Ltd and Ferranti International Plc – failed to get their offerings off the ground – or like British Telecom, launched a service only to close it down because of lack of demand – or dearth of base stations. Using statistics from MZA Research, Hutchison estimates that the market for cordless phones is growing at about 19% per annum, and that by 1997 30% of the estimated 5.3m cordless telephone users will be attracted to the Rabbit service. Hutchison has been conducting user trials of Rabbit with over 800 subscribers, which it claims have confirmed the reliability both of the GEC Plessey Telecomunications Ltd-manufactured handsets, and of the network. Tariffs for the new service have also been announced, with four packages available: the basic package, Rabbit, will cost #190 and will include handset, a park-and-recharge facility, connection to the network and the first quarter’s subscription. With Rabbit Plus, costing #240, a personal base station is also included – which gives a two-way facility while in range – while Rabbit Recall includes a messaging service and tone alert, and costs #260 – one of the biggest weaknesses of the original Telepoint concept was that it did not enable the user to receive a message asking for a call. Rabbit Recall Plus is the top-of-the-range service, and includes both the personal base station and messaging service. This will cost #300 – although Hutchison likes its Rabbits so much it has nines proliferating like the fecund rodents, and calls #300 #299.99. The initial network access charge will be #15, with access charges of #6 per month for all services, while special packages offering the messaging service and tone alert will start at #7.50 per month.
While call charges away from the personal base station are to be in line with those for public telephones, Hutchison has said that if used to call from a personal base station the service will be charged at standard domestic rates. What seems certain is that the Rabbit service will stand or fall by three factors users’ willingness to accept (and requirement for) a one-way telephony service; wide geographical availability; and price advantages over other mobile services. While Hutchison proudly points to its experience in Hong Kong to demonstrate demand – it signed 15,000 subscribers to its Telepoint service there in the first few months of operation – it still remains to be seen whether this pattern will be followed in the UK. Indeed analysts attribute much of the service’s Hong Kong success to the unliberalised market there and consequent lack of choice in communications services, although penetration of cellular telephones was about the highest in the world in Hong Kong before Telepoint was launched: nevertheless that Telepoint will be as attractive to UK users who already have numerous other types of service to choose from is by no means certain. In terms of pricing, Hutchison estimates that the cost of using Rabbit is between a third and a half of the costs of cellular, from where it sees many customers coming. While this may be true, it also seems likely that the company will have to attract subscribers from other services – such as lower-cost two-way paging – if it is to get the top few percent of customers that take
it from break-even point into the profit zone. While precise comparisons with paging are difficult, since it is generally tariffed on a fixed rate basis, the charges seem to be more or less equivalent, which would seem to make persuading customers to switch over to Telepoint even more difficult.
One problem Hutchison faces is that a decade or so ago, when the Telepoint concept was no doubt first dreamed up, distribution of pay telephones was so patchy that people returning after long sojourns in the US couldn’t believe that one had to look for a phone box in London and when they found one, chances were it didn’t work, today, that is emphatically not the case. With privatisation, British Telecom has become much more responsive to demand and greatly increased the density – and has stepped up the programme even more when Mercury’s rival phone boxes started sprouting all over the place – and the reliability problem has largely been solved by the introduction of the card phone. So that on the availability front, Hutchison faces the hurdle of providing adequate coverage and even when the company has finished installing its stations, the number will not really compete with the good old phone box, of which British Telecom alone now reckons it has about 100,000. One scenario Hutchison must be hoping to avoid is Rabbit subscribers getting frustrated with the search for a base station and dipping into their pockets for a ten bob bit to make a call from a box instead.