Co-op plans ATM satellite links

The Co-operative Bank is slashing its ATM network costs by half with a satellite communications link-up for its 350 cash machines.

The automated teller machines will be installed in Co-op convenience stores at a rate of 20 a month, as part of a #100 million deal with IBM Global Services which will manage the bank's ATMs for the next seven years.

Satellite networks are increasingly seen as a cheaper alternative to leased lines. In January, the Woolwich said that it will roll out 200 ATM machines linked by satellite into outlets of retailer Spar.

IBM Global Services solutions manager Jerry Hall said that satellite networks can be significantly cheaper than leased lines.

'A leased line spends most of its time sitting idle because the size of the messages sent by the ATM is very small. Even the busiest ATM will only send one message every 30 seconds. With a satellite you are buying bandwidth instead,' he said.

According to the bank, there are about 25,000 cash machines in the UK, and most are concentrated in the financial services area of towns, usually outside bank premises. A Co-op spokesman said that during a pilot project in the north west of England, the bank found that convenience stores with ATMs - which were linked to a satellite via a dish on the roof - recorded an increase in sales of goods.

There are only about 6,000 ATMs in remote sites such as supermarkets or railway stations, but this number will grow when all banks begin to use the same Link bank clearing network later this year, he said.

The entire population will be able to use the same network, and 'there will be no need for banks to have their own cash machines so more and more will be in remote areas', he said.

Under the contract, which IBM Global Services claims is the largest for a Europe-based ATM network, IBM will run all aspects of the ATM service, including network management, call centre support, software development and installation and maintenance services. The satellite network is due to be complete in two years.

The bank set up its first management contract with IBM five years ago, and says availability of its cashpoints has risen from 89% to 98%.