Ofcom's plans to issue licences for wireless frequency could pave way for private GSM networks

UK service providers will be able to build private, internal GSM networks for firms, after Ofcom issues licences for the Guard Band wireless frequency in May. The announcement could result in lower telecoms bills for corporates.

BT, Cable & Wireless and O2 will be among the firms awarded licences to offer in-building mobile phone networks. Routing GSM calls onto the public network or the net via firms’ private branch exchanges (PBXs) or IP telephony gateways could reduce costs by avoiding high mobile phone tariffs.

However, savings will depend on how often staff use GSM mobiles to make calls in the office, rather than fixed-line or Dect/Wi-Fi phones, and on monthly service and rental charges.

Licensee Private Mobile Networks (PMN), a division of TeleWare, will charge firms £30,000 for a three-year subscription to its Private Mobile Exchange (PMX) service. This will cover 50 users and infrastructure equipment rental, handset software and call costs.

Customers will need to swap SIM cards between internal and external networks; use dual-SIM-card handsets able to switch from one to the other after a reboot; or use PMN’s mobile virtual network operator service that combines billing for both call types.

“This has the support of mobile operators because it uses technology they have now and helps build indoor GSM coverage,” said PMN managing director Dean Parsons. He estimated that up to 25 percent of mobile charges are for calls made within the office.

Jeremy Green of analyst Ovum said savings and flexibility are the key advantages. “This is much cheaper than fixed-mobile convergence using dual-mode GSM/Wi-Fi handsets because just about any GSM phone will work and you don’t have to worry about complex, unproven technology,” he said. However, Green warned that seamless call handover between private and public networks may not prove workable.

A spokeswoman for Cable & Wireless said it would offer GSM systems to firms looking for “one handset and one supplier”. Meanwhile, BT said it would wait until its licence is awarded this week before revealing its plans.