CT2 handset: 'A payphone in your pocket'

25 years ago this month: 'CT2: A new generation of cordless phones'

In May 1989, E&T’s predecessor magazine IEE Review looked at whether emerging mobile telecommunications technology really did have the potential to become 'the greatest UK success story of the 1990s’.

Soon after this edition of IEE Review appears in print, no fewer than four new national communications networks will have come into operation throughout the UK. These new networks, based on the so-called 'CT2' and 'telepoint' technologies, will provide a new generation of low-cost mobile telephony services to the UK business community — services that are forecast to be so popular as to attract between 3 and 6 million new users over the next few years. Perhaps even more importantly, the new networks are also expected to attract widespread interest among overseas communications authorities, creating real prospects that this new British technology will form the basis for a thriving new export market for British communications products and communications operating expertise.

The new mobile telephony technology, as its full name of 'Cordless Technology 2' implies, owes its origin to the original CT1 technology that forms the basis of current cordless telephone handsets. However, since its origins in the mid- 1980s, the CT2 concept has developed far beyond the idea of simply providing a replacement for CT1 cordless telephones, and instead has become the basis for a whole range of technological and commercial initiatives that may rival in importance even the acknowledged British success story of cellular radio.

Indeed, the remarkable thing about CT2 is not that UK engineers have developed a highly innovative communications technology, but that, for once, UK managements, investors and government authorities have all co-operated promptly and energetically to exploit the technology commercially on a worldwide scale. With other UK mobile-communications efforts in areas such as digital cellular radio, 'Band III’ trunked mobile radio, wide-area radiopaging and satellite-based services also resulting in growing commercial success around the world, CT2 may well set the seal on what is emerging as perhaps the biggest British success story of the 1990s.

But what is CT2? Looked at in comparison with CT1, it is, at its simplest, a digital reworking of the analogue cordless-telephone technology. Although undoubtedly popular with telephone users worldwide (even by 1983, sales of cordless telephones in the USA had exceeded sales of all other types of telephone consumer equipment), analogue cordless telephones are simply too crude technologically either to provide high-quality communications facilities or to support large numbers of users within a given area.

With their analogue radio links, CT1 telephones provide very poor speech quality, are subject to severe noise and fading, and provide little or no protection against 'eavesdroppers' with even the simplest radio equipment. What is more, with their single fixed operating frequencies, they lead to severe problems of mutual interference whenever more than a small number of handsets are employed within the same area. These problems effectively rule out CT1 as a serious business-communications technology.

However, by turning to digital technology, all these problems can be overcome. As embodied in the UK CT2 standard (BS6833), digital cordless telephones employ a time-division duplex (TDD) technique to provide two-way communications along any one of 40 radio channels in the 864-868 MHz band. Each call over the system uses an individual channel that is dynamically selected for optimum performance, avoiding problems of mutual interference and allowing an estimated 7700 CT2 handsets to be used independently in each square kilometre. At the same time, transmitting speech in the form of I ms digital speech packets results in high speech quality and freedom from the effects of noise and fading. Transmissions are limited to 10 mW, giving a practical range of 100-200 m. Many other CT2 products, including a complete range from UK communications heavyweight GEC-Plessey Telecommunications, will reach the market before the end of the year.

Given this new CT2 specification, UK engineers have been able to develop some extremely attractive new CT2 products. For example, Shaye Communications (rescued from the former Sinclair Research empire) has launched its Forum personal telephone, a true 'pocketphone', measuring only 143-5 X 61 X 20 mm and weighing just 130 g, including an integral (non-telescopic) antenna. Equally compact and lightweight is the new Ferranti Zonephone, which, like the Forum, offers all the facilities of a modern telephone handset, including memory dialling, last-number recall etc. in a package that can not only be placed in a shirt pocket but can also be carried comfortably there all day. Both the Forum and Zonephone will be on sale by Summer 1989 at prices of £150-£200, forecast to decrease to £100 in 2-3 years' time.

Used in their simplest cordless telephone role, both the Forum and Zonephone will link with a private 'base-station' unit in the same way as a CT1 handset. However, while each CT1 base station can be associated with only a single handset, the CT2 base stations will support the use of up to six. Each handset will be able to make and answer calls, and also transfer calls to any other handset, subject to the limit imposed by the base station's ability to handle only a single call at any one time. The base station, which will simply 'plug in' either to an exchange-line socket or a PABX extension line, will be suitable for both domestic and business use, and in the Forum case will be available at a cost of £150, the same as the Forum phone itself.

The Zonephone base station is expected to be priced similarly. Important as this use of CT2 with private base stations will be, particularly for business users, it is the extension of the CT2 concept to use with public base stations that is responsible for much of the excitement surrounding the new technology. Simply by providing a network of such public base stations, or 'telepoints', each typically mounted in a weatherproof enclosure in a prominent public location, it is then possible to allow CT2 users to make calls directly into the public telephone networks anywhere within 100-200m range of the distinctive 'telepoint' sign. In other words, the telepoint can be used as a form of radio-based public callbox: indeed, the use of telepoints has been described as 'converting the CT2 handset into a payphone in your pocket'.

In operation, telepoint users will simply travel until in sight of the nearest telepoint sign, switch on their CT2 handsets, key in a personal identification number (PIN), dial the phone number required and then proceed normally with the call. The controlling computer in the telepoint unit is responsible for supervising the call, checking the entered PIN against the handset's electronic serial number, confirming the creditworthiness of the customer, and logging all call details for both administration and billing purposes. The base-station computer also constantly runs self-check programs, and reports all faults, together with all call data etc., to the telepoint network's main computers at regular intervals. From the reported call data, fully itemised bills are issued to the registered address of the handset owner, in most cases quarterly.

For many business users, particularly those used to the costs of operating cellular-radio telephones, these quarterly telepoint bills may well seem quite modest. Not only does the user save on the capital cost of the handset required (£100-£150, as opposed to some £1000 for a similar pocket cellular phone), but will typically see monthly subscription costs halved, from £25 for the cellular networks to about £12 for the new services. At the same time, call charges will be reduced from the relatively high rates of the cellular networks to a level that is predicted to be only slightly above traditional payphone call charges. Clearly, this reduction in costs compared to that of cellular radio is met by a reduction in the facilities offered, particularly the loss of the cellular network's effectively 100% 'go anywhere' coverage and ability to handle incoming as well as outgoing calls.

Given this trade-off between reduced costs and reduced facilities, will this new form of telepoint public base-station service prove popular? Certainly, a number of major UK commercial companies seem to think so, to the extent of wishing to invest heavily in new nationwide 'telepoint' networks. A total of four such networks were licensed by the UK Government in January of this year, and already work on inaugurating the new networks is well under way. The new UK networks are:

• Phonezone. Owned and operated by Ferranti Creditphone, manufacturer also of the Zonephone handset. With a head start over its rivals because of its selection as the basis for Government-backed trials of the telepoint concept last year, Phonezone has already opened the first commercially available telepoint at the Robin Hood Service Station in South London. Service stations, motorway service areas, rail and underground stations, airports and major highstreet retail outlets will, in fact, form the prime sites for Phonezone telepoints, which Ferranti Pocket-sized: the Forum handset from Shaye expects to establish rapidly around the UK, to provide telepoint access to business users within a typical maximum of 6 minutes' travelling time, wherever they may happen to be.

• Phonepoint. Owned and operated by a consortium including STC, British Telecom, Telecom France and US-based Nynex, Phonepoint expects to establish its first telepoints this Summer. As well as the typical telepoint locations identified by Phonezone, Phonepoint may possibly be able to take advantage of the 80 000-location network of BT callboxes, which would provide prime sites for telepoints around the UK. Indeed, the telepoint development raises the question of whether these traditional callboxes have any future.

• Callpoint. Original Callpoint partners of Shaye Communciations and Motorola have been joined by BT's rival, Mercury Communications. Callpoint has published one of the most 'bullish' forecasts for establishing its network. Promising an initial network of 260 major sites within 3 months of its mid-January receipt of a licence, Callpoint predicts 3000 telepoints by the end of 1989 (giving easy access to 28% of the business population), 6000 by the end of 1990 (44%) and no fewer than 25 000 telepoints (80%) by the end of its first 5 years.

• The fourth network. Although still unnamed at the time of writing, the fourth telepoint network has the advantages of backing by Philips, Barclays Bank and Shell. Not only will this backing provide some heavyweight financial resources, and the notable technical expertise of Philips' Cambridge- based mobile-communications division, but the involvement of Barclays and Shell will also give it a key advantage in establishing its network: a total of 6000 bank and petrol-station sites in prominent positions throughout the UK. Based on this, the network plans 1000 telepoints by the date of its launch later in 1989, and expects to take an impressive 40% share of the overall telepoint market.

Based on this four-network competitive market structure, the UK Government hopes that the national telepoint market will grow at the same rate as the UK's two network cellular-radio market, which is now acknowledged as the most successful mobile-communications market anywhere in the world. To make competition a reality, however, there had to be the possibility of 'roaming' between the various networks: users should be able to use their CT handsets on any of the networks according to commercial criteria only. Initially this will not be possible: the Ferranti Phonezone network will provide access only to Ferranti Zonephones, and the Phonepoint and Callpoint networks will accept only the Shaye Forum phone, leaving only the fourth Philips/Barclays/ Shell network so far uncommitted.

To overcome this initial incompatibility, all the companies involved are currently working hard to develop a new UK CT2 common-air interface (CAI) standard. Once implemented, this will allow any CT2 handset to access any telepoint network — a feature that is regarded as so vital that the UK Government has made its full-scale use by no later than 1991 a mandatory condition of all the four telepoint licences. Some consumer interests have argued that the launch of CT2 should have been delayed until the CAI was fully operational, but the consensus in both industrial and Government circles has been that moving ahead with commercial exploitation of the new British technology now is essential if UK companies are to retain their lead in the world CT2 markets.

Just what are the prospects of developing worldwide export markets for CT2 and telepoint? Even at this early stage, the signs are very encouraging for UK interests. For example, French interests are already keen to establish their own telepoint (pointel) networks and will be using essentially UK-derived technology to do so — even though, in their public pronouncements, they contrive to give the impression that the whole thing had been a French invention all along. Already, the French group Crouzet SA is establishing a trial pointel network using Shaye equipment, and the close involvement of Telecom France in the UK-based Phonepoint consortium has been confirmed as indicating a strong possibility of a reciprocal BT involvement, in a new French CT2 network. Phonepoint's backing by New York's Bell operating company, Nynex, is seen as indicating a similar US opportunity, and Phonepoint is also known to be in serious negotiations about a West German CT2 network backed by interests including Daimler Benz.

Even so, the UK-developed CT2 is not without its rivals. In fact, CT2 has already formally lost the competition to be accepted as the official European standard for digital cordless telephone systems, with the rival Swedish approach now accepted as the digital European cordless-telephone (DECT) standard. However, based on 1.6GHz radio frequencies and time-division instead of frequency-division multiple- access operation, DECT is currently something of a technological unknown factor: the full specification is not expected until Autumn of 1991, and full-scale commercial use is only forecast for some 3-5 years away. By this time, telepoint networks based on CT2 may well have some 5-15 million users throughout Europe.

However, as the British CT2 proponents are keen to stress, their current exploitation of CT2 does not rule out later exploitation of DECT. Certainly, DECT may eventually have significant advantages in some application areas, and indeed has always been seen, even by its Swedish advocates, as being first and foremost a technology aimed not at public telepoint services, but at a new generation of cordless private automatic branch exchanges (PABXs) — a market that could require over 30 million cordless handsets throughout Europe during the next 10 years. Development of new cordless PABX add-ons is already seen in the UK as a follow-on step from current CT2 efforts, and achieving compatibility between CT2 and DECT technologies within PABX systems is seen as quite feasible. Even the UK telepoint operators see the possibility of offering DECT access in parallel with the new CT CAI standard during the 1990s.

With DECT possibly being added to CT2, the future for digital cordless systems seems very bright, not only in Europe and the USA but worldwide. Indeed, for many countries not yet operating widespread cellular-radio systems, adopting digital cordless technologies such as CT2 may well be the easiest way to provide public mobile communications systems. Certainly, Ferranti is one UK company that is actively seeking to develop this international market, pointing out that start-up costs for a telepoint network are only some 10% of those for a cellular-radio network, but that telepoint revenues from a national network operator can reach 30-50% of those to be expected from a cellular network.

Is CT2 therefore to be seen as a serious rival to cellular-radio technology worldwide? On the contrary, in the longer term, CT2 can be seen as actually boosting cellular- radio usage, as users who have been attracted into the mobile communications market mainly by the low costs of CT2 decide to 'trade up' to cellular radio for the fuller services it can offer. In fact, the CT2 handset, which is already being promoted as the 'personal radiophone', may well become what the computer industry would term the 'entry-level' product for the whole mobile-telephony market. Then, just as the emergence of the personal computer acted as a spur to the computer market as a whole, so the emergence of the personal radiophone may take mobile communications into a new, even more successful, stage of development.


1 MORALEE, D.: 'Special report: the CT2/telepoint revolution', Mobile Communications for UK Commerce and Industry, Spring 1989

2 HARMER, P.W.: 'Phonezone : a totally new public telephone service', Proc. Comex 88 conference, Federation of Communications Services, London

3 MOXLEY, B.: 'Phonepoint: a new way of communicating', ibid.

4 CARRINGTON, J.: 'Market opportunities for Phonepoint services using cordless telephones', Proc. Financial Times conf. on the outlook for world mobile communications, 1988, Financial Times, London

5 REMY, M.: 'A French perspective of developments', ibid.

6 Statement by the Secretary of State for Trade & Industry, Lord Young, to the House of Lords, 26 January 1989

Originally published in IEE Review, May 1989 (Volume 35, Issue 5)

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