Does Tetra pack enough punch?

The Global System for Mobile communications (GSM) isn't the only wireless network currently available in the UK.

Dolphin Telecom is also championing a minor player, Terrestrial Trunked Radio (Tetra), with which it hopes to target business customers.

Of all the UK telcos, Dolphin has the fewest number of customers - just over 30,100 subscribers - and it doesn't try to compete with the four main GSM network providers. But while Tetra looks good on paper and seems ideal for small businesses, there is a catch: it might not survive in the battle against GSM.

Tetra provides smaller organisations with a cheap means of using wireless wide access networks. It was initially intended to provide high call rates, simultaneous access to voice and data services, and encrypted communications for public safety organisations.

But Tetra handsets also can act as walkie-talkies, enabling businesses to create their own wireless wide access networks if they want them. The cost of radio access is virtually nil, which means that it can provide smaller enterprises with a low cost means of communication.

The technology's low frequency bands also mean that it does not need as many base stations as GSM, so it is cheaper to implement. The UK's 900GSM network requires 1500 base stations, for example, while Dolphin only needs 600.

The telco's target market is businesses that require fast, convenient and brief communications on a daily basis such as taxi firms, couriers, security companies, field sales teams and construction sites.

And Dolphin hopes to mirror the success of Nextel in the US, which uses Motorola's proprietary iDEN system, a slightly different version of Tetra to the one it provides. As a result, the company has acquired commercial licences across most of Europe, and begun to construct networks in France, Germany, Belgium and Luxembourg.

But Tetra isn't well-established in Europe, and the technology does not yet have GSM-style international roaming capabilities. It also has few subscribers, and is unlikely to survive in a head-to-head conflict with GSM. All this means that Dolphin is making slow progress in proving that Tetra can work commercially.

The 3G threat
And the competition is also going to heat up. So-called third generation (3G) telephony, also known as the universal mobile telephony system (UMTS), is scheduled to appear soon. It can transmit data much more quickly than Tetra's maximum data transfer rate of 28.8kbps.

Although Dolphin could choose to upgrade its network to second-generation technology, known as Tetra 2, which has comparable data rates to 3G/UMTS, the move would be an expensive one.

Alternatively, the telco could position Tetra as parallel technology to UMTS, by asking its parent company, TIW, to let it use its UMTS licence. This latter option looks attractive, especially as Motorola has confirmed that it could have a dual mode Tetra/UMTS handset on the market in about two years - just about the time that UMTS is due to emerge in Europe.

But while this dual-band option would ensure Dolphin's future, it would effectively spell Tetra's end as a serious player in the UK market.

Key points

• Tetra is a wireless network that meets the needs of smaller organisations
• Although cheaper than GSM to roll out, Tetra might not survive when pitched against the major digital networks
• Tetra's champion in the UK is Dolphin Telecom.