It looks fairly definite now that Telefonica de Espana SA will award part of the $120m business for its new digital cellular telephone network – to the pan-European standard – to Motorola Inc. The contract in question is worth $73m for the radio basestations and switches, for which L M Ericsson Telefon AB’s Spanish subsidiary, […]
It looks fairly definite now that Telefonica de Espana SA will award part of the $120m business for its new digital cellular telephone network – to the pan-European standard – to Motorola Inc. The contract in question is worth $73m for the radio basestations and switches, for which L M Ericsson Telefon AB’s Spanish subsidiary, Intelsa also bid. While Telefonica found both companies equally competent in technology, the US multinational’s offer worked out about 14% cheaper. Motorola’s pared its prices to the bone because it is so keen to get into the Spanish market and use it as a foothold for its expansion into the rest of the European cellular systems market. In this respect, Motorola’s interests coincide with those of Spanish company Amper SA, which already collaborates with AT&T Co, and the two companies could well end up with a marketing agreement. Indeed, it is possible that Motorola will subcontract manufacture of the new system to Amper. Telefonica authorised the start of negotiations with Motorola back in December last year but the final contract will not be signed until sometime later this spring. Manufacture should begin in October, with the system being planned to be ready for use by 1990. Spain is in great need of a network, for if the present one keeps growing at its present rate it could become saturated due to lack of frequencies. The 450MHz network has 180 channels of which the Ministry of Transport has 92, and that is quite insufficient in the urban areas of Madrid and Barcelona which have 40% of all users. The 900MHz network will have about 1,000 channels, of which Telefonica hopes to get 300, and which will allow expansion of the service with less danger of saturation. The new network phones will also be approximately $1,280 cheaper than the 450MHz phones which cost $3,420 each. Telefonica hopes to have 30,000 car phones in by the end of 1989, 60,000 by the end of 1990.
