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July 26, 1988

ORBITEL MOBILE COMMUNICATIONS MANAGES UKP1m PROFIT ON UKP21m SALES IN YEAR ONE

By CBR Staff Writer

One year after its creation, the Orbitel Mobile Communications Ltd joint venture between Racal Electronics Plc and Plessey Co Plc – regarded as so valuable by Racal that it wasn’t going to have any GEC Plc fingers messing about in the pie, and refused to allow Plessey’s 50% pass to the GEC Plessey Telecommunications venture – celebrated its birthday by posting operating profits of UKP1m on turnover of UKP21m after investing UKP3m in research and development. The results were higher than anticipated, mainly because manufacturing efficiencies exceeded expectations. Orbitel now plans to boost staff levels to 300 over the coming year, with most of the additions to the engineering team. Market penetration of cellular telephones has already reached the critical 3% in Scandinavia, and the UK and US are set on the same course although penetration is still creeping along below 1% at present. The one potential threat to the cellular business is the embryonic development of cheap radio zonephones. Orbitel is taking an active role in the proposed CT2 cordless phone technology, which is expected to flower into a live service at the end of the year. We see the cordless market moving to converge with cellular through micro cell convergence said Mike Pinches. Bread and butter business for the company is at present selling cellular base transceivers under licence from L M Ericsson, and the order book is standing at a healthy UKP20m.

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