PBX support market freed for expansion

The telecoms maintenance market was deregulated this week, but withless of a bang than a whimper, reports James Governor

Does deregulation of the telecoms maintenance market affect you? It should.

It affects every business in the UK that uses a telephone.

Deregulation consists of two major changes. First, suppliers no longer require accreditation from Oftel, the telecoms industry regulator, to maintain switching equipment. Second, users will no longer be legally bound to sign maintenance contracts if they don't want to.

The DTI is to revoke and reissue all UK telecoms services licences and self provision licences - the two major licences introduced by the 1984 Telecoms Act.

The licences were introduced to protect customers and ensure the public telephone system kept running smoothly. But technology has come a long way since then - switches have become more reliable and technical innovation makes it harder for maintenance providers to keep up with new software technologies.

One of the significant changes is the convergence of telephony and computer systems. Maintenance providers often know the hardware inside out, but can't cope with software integration issues any better than the owners of the systems can.

The introduction of computer technology works both ways; telephony vendors are now offering Ethernet switching. This convergence, and the opening of the market, means computer companies with service and maintenance arms are likely to enter the fray.

The change covers both keysystems, the small switches for up to 70 or so lines, and private branch exchanges (PBXs), which can cope with thousands of phones. As a result, it affects both large and small businesses.

The main effect of deregulation should be to increase choice for the user, because the number of maintenance services providers is expected to rise from around 150 today to at least 1,500. But will it lower cost or improve quality? Worryingly, those most affected are ignorant of the situation. Industry consultation began in April, but recent research shows 75% of users remain unaware of the change.

GPT Communications Systems is arguably the company with the most to lose.

It claims to have 20% market share and has annual sales of around # 140m.

The company nevertheless welcomes the reform.

GPT claims to have invested heavily in its infrastructure to ensure it can offer an added-value service under the new regime. For example, it is to introduce a help desk to answer queries on telecoms deregulation which is open to anyone, not just GPT customers.

Ralph Morris, customer services manager at GPT, said: 'For large users, price is not a major issue.

The telephone is absolutely critical to their business.'

But GPT claims that it does not intend to cherry-pick customers by dropping its customers using keysystems.

For the small business, deregulation may prove a boon. Keysystems are reasonably reliable, and maintenance on a call-out basis may well prove far more economical for users than compulsory contracts.

Morris believes that under the new regime, the most successful vendors will be those which offer the most useful service, something which has arguably not always been the case. Users have been locked into vendors, not just because the technologies are proprietary, but because it is the law

GPT, for example, discovered that a premier league football club had a Monday-to-Friday telecoms maintenance service - suitable for a city office perhaps, but in football, what happens when Saturday comes?

Far more flexibility is expected as a result of deregulation, including suppliers offering contractual 'fix' times, rather than response times.

What, after all, is the use of having an engineer on site in two hours, if he takes two days to solve the problem?

One organisation which sees an opportunity to cover itself in glory during the industry shake-up is the Telecoms Industry Association (TIA), a trade body set up to represent telecoms vendors, from big players like Mercury, Alcatel and AT&T, to small husband-and-wife teams.

Alan Cobb, the TIA's director, said the general view of its membership is one of cautious support for deregulation. The TIA has ambitions to replace government regulation of quality standards with self-regulation.

Observers fear that standards of customer service could drop with the entry into the market of smaller and less experienced firms, something which could affect the image of the industry.

Prior to deregulation, vendor licences were handed out by the DTI, after consultation with Oftel. Standards of professionalism and ISO9000 certification were required to qualify for a licence.

Without this scheme there is a vacuum - one which the TIA aims to fill.

The association is creating its own accreditation scheme, and will look to police its members by assessing their competence and ensuring they follow a code of conduct.

The TIA would like to copy the Corgi scheme, formed when the gas-boiler maintenance market was deregulated - the number of engineers increased, but standards still had to be met. TIA is also examining a bond scheme, similar to that run by the Association of British Travel Agents, so that any problems caused by the collapse of a member company could be cleared up.

Both the Telecoms Managers Association and the Telecoms Users Association (TUA) have also given the new regime a cautious welcome, and both say they intend to work closely with the TIA as its seeks to expand its role.

Bill Mieran, chairman of the TUA, said: 'It will not be unusual to see users and industry sitting at the same table - we can work together to ensure benefits for all.' Now there's an interesting thought.