BellSouth PCS offering contingent on Telecom interconnection agreement

BellSouth plans for a PCS (personal communications services) offering sometime next year will depend largely whether it can get a reduction in its interconnection rates with Telecom.

BellSouth plans for a PCS (personal communications services) offering sometime next year will depend largely whether it can get a reduction in its interconnection rates with Telecom.

The company approached Telecom about being part of its PCS trial at Auckland-based New Zealand Wines and Spirits, but the rates Telecom wanted--which were in line with the current interconnection agreement between the two--made it prohibitive, according to BellSouth corporate development manager Mike Reynolds.

The two parties are currently renegotiating their interconnection arrangement, which expired earlier this year. And unless the rates come down it could stymie BellSouth's PCS offering.

"Not if Telecom go in with the sort of pricing scheme they used for the trial," says Reynolds. "We don't want to go into business where there's no chance of making money. If we can't compete in that business the customers are the ones not getting the choice."

The current interconnection rate amounts to full retail, he says, leaving no margin for the introduction of new services.

"So that is a factor. We're not saying it's the one and only factor; there are other issues as well." However, the company describes the interconnection arrangement as the "thorniest" of the problems to be resolved.

The other issues will be progress on number portability, and allocation of 2GHz spectrum, being decided by the Ministry of Commerce early next year.

On the portability issue, Reynolds notes Telecom CEO Roderick Deane's recent comment that it could be available in six moths. "We were happy to hear that, and we'll be reminding him of it."

However, BellSouth says there are no technological issues why it couldn't offer PCS now. And it describes the new IS136 standard, which Telecom is using, as a 'catch-up technology'.

The company is testing several options, both internally and externally, including PABX-wireless integration and use of microcells.

"What that means," says BellSouth's strategic marketing manager Leslie Preston, "is that once we have the spectrum and the systems installed we can offer integrated wireless, PABX systems with our mobile network. You are using PABX trunks and dialling PABX extensions and functions the same as any other phone in that environment, but when you leave that environment your phone automatically moves over to mobile and you can use the same phone outside in the GSM cellular environment."

This is not the only area in which the company has been running trials, says Reynolds, "but, by design, we've been low key. We've been working on a number of options for some time."

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