(Hutchison 3G)

Members present:
Mr P Doherty (Chairperson)
Mr Armstrong
Mr McClarty
Dr McDonnell
Dr O'Hagan
Mr Wells

Witnesses:
Mr P Robinson
Mr R Murray Hutchison 3G
Mr J Gurling

The Chairperson:
The Committee welcomes Philip Robinson, Ross Murray and James Gurling from Hutchison 3G. You will make a presentation that will be followed by questions.

Mr Gurling:
I am the head of our Government affairs function in Westminster. I report to the board on public policy and public affairs matters through all the devolved institutions. Philip Robinson deals with community affairs and relations with local communities and is also of great assistance in public affairs. Ross Murray deals with our site acquisition and related roll-out issues.

It might be useful to put Hutchison 3G in current context. It is a bit of a nebulous brand - in fact is not a brand at all. We will launch our full service in the second half of this year, and through a branding process we will become known under a new name. The new name has been chosen, but in the normal form of branding decisions there will be some sort of announcement later. The brand will sit comparably along with Vodafone, Orange and so on.

Hutchison 3G is owned by three different companies: Hutchison Whampoa of Hong Kong, NTT DoCoMo of Japan and KPN Mobile of the Netherlands. The main shareholder is Hutchison Whampoa, which owns 65% of the company. I will detail some of its main attributes later.

Hutchison 3G acquired the largest element of spectrum in the infamous auction in May 2000. The UK licence cost about £4·4 billion. It is a serious investment in the UK, and nobody takes it more seriously than we do. Nevertheless, the benefit of our combined financial backing was such that it was not debt-drawn. The investment was based on bank financing. However, that has not held up development at all. We are obviously keen to ensure that we get value for the licence across the United Kingdom.
One of the licence requirements was that we cover 80% of the population. At launch, that figure is substantially less. Some people have asked whether this would include Northern Ireland or Scotland. As a company in the United Kingdom, Hutchison 3G is absolutely committed to UK-wide provision. We will not be launching in London and then gradually elsewhere. We will come to the main conurbations from the beginning. Therefore, when we launch in London we will also launch in Belfast, Edinburgh, Cardiff and the cities in between. As Hutchison 3G has the largest amount of megahertz, it can do a great deal more with the spectrum. The company has significant capacity and therefore a significant cost advantage.

Hutchison Whampoa is not only a telecommunications company; it is a large international conglomerate with a range of commercial interests. Last year it was one of the largest inward investors in the United Kingdom. It is looking to Hutchison 3G to provide for it, and that is never far from its heart. Members may wonder why I have provided the Committee with a picture of someone buying fish. That is an example of the diverse commercial operations of Hutchison Whampoa, and the picture shows one of their newest retail facilities in Hong Kong.
We have third generation (3G) interests not only in the United Kingdom but throughout the world. Hutchison Whampoa created Orange; it set that up, bought the licence and created the brand. The same team is now creating the branding for Hutchison 3G. Presumably, we will not simply be called a different colour, but our name will reflect the new nature of the European-wide technology that we are involved in. NTT DoCoMo is running similar technology in Japan, and it is proving to be very popular there. We have had interesting feedback from customers. Although there is a difference between United Kingdom consumers and European consumers, the technology is available, it is being used and it is proving to be very popular. With a few tweaks and adjustments it will be of great value and service in a variety of ways throughout the United Kingdom.
That is a general overview of the corporate side of Hutchison 3G. Mr Robinson will discuss some of the specific things that apply to Northern Ireland.

Mr Robinson:
In December 2001 Hutchison 3G embarked upon an ambitious consultation process as a new operator in the mobile telecommunications market in Northern Ireland. Our attendance at this Committee is part of that consultation process. We have undertaken to consult with local councils throughout Northern Ireland, with members of the business community and with the Minister and officials from the Department of Enterprise, Trade and Investment. The technology that we are providing in the Province will be a major asset for attracting future inward economic investment. Hutchison 3G would like to work in partnership with the Committee and we would like to assist in any way we can.

In April 2001 we commenced the roll-out of our network development in Northern Ireland. We have an office in Clarendon Dock in Belfast employing about 60 people. That figure takes into account people who are employed in subsidiary companies such as public affairs consultants, agents and various other people. We are the only third generation operator with plans to provide a service in Northern Ireland in 2002. Since 2001 we have made an approximate initial investment of £60 million in Northern Ireland. Hutchison 3G is aware that sharing masts is a very topical issue. Hutchison's view is simple - we will always share masts where it is technically feasible, legally possible and where local planning authorities deem that the preferred environmental solution.

We have already reached agreements with major independent mast providers. The main one for Northern Ireland is Crown Castle International (CCI), the owners of the BBC transmission sites in Northern Ireland. We will not only share other's masts; we will make ours readily available to share.

The map that is contained in the presentation shows the routes we will initially provide coverage to. They reach from Belfast through Antrim to Londonderry, across to Coleraine and back again. When we launch, third generation (3G) coverage will be available in the highlighted routes, but we have also agreed with BT Cellnet to provide second-generation mobile phone coverage in areas where 3G coverage is not available initially. The map also demonstrates our network as a roll-out strategy in several phases.

Let me update you briefly on that issue. When we came to Northern Ireland, we concentrated initially on the major conurbations - Greater Belfast and the Londonderry area. That has now been completed, and we are nine months ahead of schedule. Indeed, we have moved on to phase 2, which will link up the main conurbations and take the network further westwards. For example, we will cover Lisburn, Craigavon, Portadown, skirt around Armagh, and then take the network south towards Newry. We have included the M1 from Portadown to Dungannon, and we can touch on that in more detail later. We have had discussions with representatives from South Tyrone borough council, who initially approached us about bringing the network. Hopefully we will be able to provide a service there soon.

Our network will cover the west of the Province. Phase 3 will probably range from Portadown to Dungannon, Omagh, Strabane, and up again to Derry. We will embark on those plans during the next year or so.

I would like to give the Committee some further information about our company in Northern Ireland. We wish to consult at all levels - with elected representatives or local groups - in the community. We will extend our network further westwards, and we will launch what we call a corporate social responsibility plan (CSRP), thereby perhaps investing in local projects in communities that we are using. By the end of 2003 Northern Ireland will have one of the best third-generation networks of any region in Europe. Our company views that fact alone as a very strong argument for economic development and inward investment, and it is one argument that we wish to press this morning.

What will our technology look like? The first slide, entitled 'Innovative Designs', shows 'The Bell', which is a pub in Maidenhead just west of London. Our headquarters are located in Maidenhead, and the pub - a test site for the Maidenhead area - is directly opposite our headquarters. At the top left-hand side of the front of the building is a little antenna just left of the bricked-up window. That antenna is a test site, and it has the capacity to cover approximately 30,000 users in the Maidenhead area. The equipment for that site is stored in a ground-floor room at the back of the pub.

The next picture is a drawing of the Culloden Hotel in Holywood. I apologise that it is not clearer.

There is a tower with a flagpole on top of it in the right-hand side of the picture. Hutchinson 3G would like to erect a second flagpole on another one of the towers at the Culloden Hotel and place its antenna in the flagpole. It is not Hutchison 3G's policy to run round Northern Ireland erecting flagpoles, but it is a good way to disguise its equipment, and Hutchison 3G is pleased to be able to do that.

We have included the timber cover monopole in the presentation because it is one of the more common types of equipment used in Northern Ireland. That technology can go up to a maximum height of 30 metres, and local planning authorities in particular view it as being more environmentally friendly. Hutchison 3G tries to disguise the monopole, so that it blends into the local natural environment.

Mr Wells:
In my constituency, the most controversial planning issue is the positioning of mobile phone masts. There are about 16 or 17 controversial masts at any given time; there are no non-controversial masts in South Down that I am aware of. Can your proposal go ahead? Is Hutchison 3G happy to share masts in Northern Ireland, or must it get new masts?

Mr Murray:
The 3G network requires more sites than the 2G network, but if there are existing masts, it will share them. Hutchison 3G has agreements with other operators, including Crown Castle International. In the last phase, 109 sites were issued. To date, 45 of those are in shared sites; a further 30% will be placed on buildings. As the remaining sites have not been identified, Hutchison 3G is keen to share masts. It is a cheaper and quicker option, and mast sharing is part of Hutchison 3G's future policy.

Mr Robinson:
Mr Wells, you will appreciate that site sharing is not available in every situation. For example, some sites may either be full with other operators, or, as Mr Murray said, it may not be technically possible to share. However, Hutchison 3G is keen to share masts at every opportunity. It recognises the geographical make up of Mr Well's constituency, in that there are hills and mountains, and it realises that it must work within those constraints. Therefore, Hutchison 3G is focused and has a policy of sharing sites when possible.

Mr Wells:
I do not know whether you have spoken to Nicky Urey, the public relations manager of Crown Castle International about the difficulties that she has had in negotiating with residents who are bitterly opposed to the masts. The appearance issue is tangential. They are really concerned about the health risks. For example, Northern Ireland Electricity is one electricity provider that uses one set of poles and one set of wires. My concern is that in this case there will be six sets of poles and six sets of wires. There are four established mobile phone companies, and Hutchison 3G and Eircom are to come in. Therefore, would it not be rational to share sites, masts and bandwidths? Could Hutchison 3G team up with Cellnet and use its transmitters in order to prevent the erection of a rash of new transmitters?

Mr Gurling:
There is a difficulty with competitive regulation. The amount of bandwidth available for each operator is carefully set out. The purpose behind Hutchison 3G's being a fifth entrant in the market is to provide extra competition. That is why Government will set up a fifth operator.

Your point is valid, and the issue concerns the technology that is required. The power behind the 3G transmissions is much less, so there is general benefit to be gained from comparing a 2G mast to a 3G mast. They emit power at different levels. The difficulty is that if your transmission is less powerful, you need more masts to pick it up.

For commercial and other reasons, we wish to share sites wherever that is possible. In the UK, we have been negotiating to share some electricity pylon sites, simply to minimise the number of new masts built. Elements of the new technology will mean that there will be more applications to build masts.

Mr Wells:
There is a fundamental difference between the density of the rural population in Northern Ireland and that in the rest of the United Kingdom. I was in England on Monday, where it is possible to travel for miles in the countryside without encountering a house. It is possible to put up a mast there, in the knowledge that it is more than 500 yards from the nearest house; it could even be 5 miles from the nearest house. However, in most rural parts of Northern Ireland, it is impossible to put up a mast that is not close to houses. Therefore, the policy here should be different. The regulations should be changed for Northern Ireland to allow more sharing of masts and band-width. That would avoid the problem. I do not know if my constituency is representative of others, and I have no axe to grind with Hutchison 3G, but it will face enormous problems getting extra masts built in rural areas, because the residents are absolutely against them. Having seen the difficulties that Crown Castle International have already experienced, I think Hutchison 3G is particularly unfortunate because it is entering the market in Northern Ireland at a late stage, when so many battles have still to be fought.

Mr Robinson:
As the community affairs manager, one of my roles in Northern Ireland is to consult with people such as you, Mr Wells. Although we have not yet brought the network to south Down, we plan to do so in the near future. I would be pleased to hold discussions with you to see if we can take the concerns of communities and their representatives on board. In that way, we may be able to find sites that will be acceptable to us and to the communities. That is why we are embarking on a consultation process. We are keen to hear people's views, and we are happy to do that in South Down and other constituencies.

The Chairman:
Please continue with the presentation.

Mr Robinson:
We will touch briefly on some of the legislative and Government matters that concern the industry. Under the heading of "social and economic development", we have quoted a paragraph from the Programme for Government. Hutchison 3G was pleased to see that the Programme for Government effectively welcomes and acknowledges that the Northern Ireland economy needs e-society and competitive modern telecommunications.

Hutchison 3G will transform education and knowledge. It will widen access for all, which will benefit many people; it will promote competitiveness for the benefit of customers; and it will modernise Government to provide better and more convenient services.

With regard to our commitment to the delivery of this service, we have made a significant investment in the network, simply to provide quality network coverage. Initially, we have focused on the principle towns in the Province, but we want to extend the network into rural areas.

Customers will be able to use the service for longer and from a wider geographical base. Coverage will be provided in locations where customers demand the service, both at home and at work. However, we also recognise that the planning policy needs to reflect the importance of the mobile e-society that we are all attempting to create. To that end, the industry is willing to work with stakeholders to ensure a co-operative relationship in the future.

To put it simply, it is important to strike a balance. We are aware of the impending changes to Northern Ireland planning regulations. We are concerned that, without an adequate way of addressing concerns, the delay to, and the bureaucracy of the planning system will hold back our plans for the network.

Therefore, the operators propose to work harder to address public concerns - hence the adoption of the 10 commitments which are to improve consultation, communication, and provide more information and transparency. The 10 commitments arose out of the conclusions of the Stewart Report, by the independent expert group on mobile phones set up by the Government approximately two years ago. The report made a number of recommendations that were taken on board by the operators who came together and, as a result, formed the 10 commitments. We are pleased that Hutchison 3G was one of the first operators to sign up to the 10 commitments, and we are abiding by these as best we can.

Mr Gurling:
One of the important elements of the 10 commitments is the industry undertaking to exercise pre-consultation, which has not been carried out as much as it should have been. This means that there is a practice model that identifies particular sites of interest and ensures that the communities immediately around them are informed and included in the plans in a way that was previously absent. The days where operators threw up a site and disappeared are over, with or without best practice legislation. From the industry's point of view, that is one of the major elements encapsulated in the 10 commitments. We at Hutchison 3G will do that as good corporate practice, as we realise that everyone's first experience of us will be the first time we make a site application.

Mr Robinson:
On the issue of legislative changes in planning, in our presentation we have set out a number of concerns regarding the development of the network in Northern Ireland. Frankly, full planning will slow the introduction of new third generation technology. However, as a company we are ready and able to accommodate the new changes. Our colleagues in Scotland have embraced their amended planning legislation wholeheartedly, and we are working well with the legislation.

We want to ask some questions, as we are interested in your thoughts on this issue as elected representatives. With the change in legislation there may be a risk of deferral and delay, of continued moratoria and a continued unfriendly telecom policy from local government in the Province. We are interested in hearing how we can mitigate these risks.

Mr Gurling:
There are around 1 million mobile phone customers in Northern Ireland. The Federation of the Electronics Industry (FEI) commissioned an independent report by PriceWaterhouseCoopers, which looks specifically at the economic impact of changes in planning. What they found is similar to what we expected our experience to be in creating investment concerns. We will provide you with a copy of the FEI's report.

It is a system that we can make work, but it will involve one-off financial hits, and we want to make that clear. If the points made by Mr Robinson can be taken into account over the coming years, it is a system that will surely work. However, it is a question of both sides coming to an understanding of the implications.

Mr Robinson:
To summarise, Hutchison 3G believes that mobile communications are vital to the delivery of modern and effective business here in Northern Ireland. We have put significant investments into our network to ensure quality network coverage. The services will be supporting broadband objectives, which are essential to the competitiveness of the UK and Northern Ireland economies. In essence what we are providing in the Province is broadband - anywhere at any time. We recognise that planning policy needs to reflect the importance of the mobile e-society. Finally, the entire industry is willing to work with stakeholders to ensure that a co-operative relationship will continue in the future. That concludes our presentation, and we will be pleased to answer your questions.

Dr McDonnell:
Are we not going to be over-provided for? I appreciate that perhaps broadband brings a few extra dimensions to the current service, but at times I get the impression that four systems are already functioning, and you and somebody else are offering a sixth system. Are four systems not enough?

Mr Robinson:
There are four operators of second-generation telecommunications in Northern Ireland. For the next 12 to 18 months we will be the only operator of third generation technology. We believe that the benefits from this form of technology will certainly outweigh those of second generation technology. The more operators in the market, the more competitive it will be. We argue that consumers can benefit from that.

Furthermore, when this technology eventually takes hold, second generation operators will be moving up to third generation. Second generation telecommunications will eventually diversify into third generation, as happened between 1G (analogue) and 2G (digital) services. We do accept your concerns. From the outset the Government decided to award five contracts under the third generation licence, and something similar under the second generation of licences.

Mr Gurling:
Increasingly, telecommunication is not going to be about voice provision; it is going to be about the content you can receive on your handset. The handset is going to change substantially - in look and feel - but you will be able to get differentiating products on your handset. For example, we recently signed a deal with the Premiership league. Instead of having a text message on your phone saying, "a goal has been scored" and giving you a result, you will be able to opt to see that goal being scored, just moments after the game. It will be a real-time play. We have a deal with the Premiership and no other provider will be providing that same service. This will be similar for many business applications.

The Chairperson:
Will it be legal to watch that goal being scored while you are driving?

Mr Gurling:
I do not think that would fit in with the Highway Code at present, so one would hope people are not doing that. Nevertheless, people will be able to choose whether or not to avail of that particular service. Different facilities will be provided by different systems, and different deals will be done. Other sporting events will be available also, and business providers will be able to link into your Microsoft Outlook and so on. People will buy for content, as well as whether they have got voice provision. To answer Dr McDonnell's question, competition is going to change - consumers will be looking for different services from their mobile devices.

Dr McDonnell:
What is the economic benefit of seeing the goal scored, or the economic disadvantage if you cannot see the goal scored?

Mr Gurling:
The economic advantage for whom?

Dr McDonnell:
For Joe Public. Would Joe Public be better off being able to see the goal scored on his mobile phone, having already seen it scored about six times either on television or somewhere else?

Mr Gurling:
Jeremy Bentham talked about philosophic calculuses as a means to measure peoples' enjoyment. I do not know how mobile phones would rate on that scale, but there was a day when people could not imagine how useful a fax machine would be. The same thing will happen in relation to new technology.

Dr McDonnell:
I accept that. I was being slightly facetious about the goal being scored. That is not the issue. We could compare generations of phones. I can carry my small mobile phone, but I hated my old one. I did not use my original mobile phone. I could not use it, and I did not like it. I can hardly go to bed without my new one - it has become an appendage. How will third generation technology help my life economically, positively or otherwise? We are really looking at the economic benefits here.

Mr Gurling:
As Mr Robinson said in his presentation, the availability of the service will help people make investment decisions as to whether they locate here. That has clear economic benefits. It is a serious economic issue as to whether they could use third generation technology contiguously right across Europe. That is difficult to quantify at this stage. We are planning business models based on the service that we intend to offer, but those are at an early stage.

On individual economic benefit, if you are a small business or a sole trader, you will be able to do much more business without necessarily being linked into your desk station. You will have a full office facility, so you will not have to hump cumbersome handsets around. You will be able to do a lot more from your third generation device. The current situation will change, because we will move from phones to facilities. You might have a third generation plug rather than a third generation phone if you move between computers. It is difficult for me to give you an absolutely straight answer on individual commercial benefits. We believe that the technology is necessary - we are putting together a business model that is predicated on the need for the technology, its future use and uptake. The economic benefits will be seen more clearly through regional business locations and business-to-business applications - those will drive it in the early stages.

Mr Robinson:
Let us look again at the map of the main routes on which we will initially provide this form of coverage. For example, the Chairperson represents West Tyrone. If Mr Doherty owned a third generation mobile phone and he were travelling from West Tyrone to Stormont, he could communicate using the new technology, rather than having to wait to pick up e-mails, or whatever, until his journey was completed. However, it remains to be seen whether that will be allowed. That is the form of communication that we are talking about. Banking facilities will also be available.

I wish to cite one possible inward investment case. We are in negotiations with a site provider in Derry - that provider is also in negotiations with a major American firm, which could result in investment coming to the city.

The firm wanted to know whether a third generation mobile broadband service would be available here. The site provider came to us, we investigated the matter, and he was able to go back and say that it should be available. The company said that although the service was not essential, it would be a major incentive to investing here, rather than in other areas in Europe.

The company, which will be dealing with a call centre or similar business, has since come back and said that, rather than it being an incentive, it is now going to be essential. Those are the areas that we are working in and the opportunities that we are creating for business and industry - particularly in the mobile broadband market.

Dr McDonnell:
There are difficulties even with first and second generation coverage. How much width are we talking about? We refer to a bandwidth, but I am talking about "scatter width", or whatever, on each side of the red lines - the key routes shown on your map. For instance, will Newcastle in County Down receive coverage?

Mr Murray:
Not in what we are doing at the minute, but that should happen in the next phase. Average site coverage is perhaps what you are referring to.

Dr McDonnell:
I am looking at Ballymena, Ballymoney, and Coleraine. How much coverage will there be to the right of the red line?

Mr Murray:
Each site will cover a maximum of about four kilometres in a 360° arc. However, roadside sites will often just cover the roads themselves, given that the surrounding areas are so rural. The lines on the map in between the towns are purely road coverage, and there would be a minimum amount of coverage to either side of them. There would be coverage in the major towns on the route.

Dr McDonnell:
I am aware of criticism from places such Ballycastle, the south Down coast - although that is more Jim Wells's pitch - and Fermanagh, that all these things come only to Belfast and the "golden corridor" running to Coleraine or beyond Coleraine to Derry.

Mr Murray:
We are currently just in phase one or phase two.

Dr McDonnell:
How far will you roll out?

Mr Murray:
We hope to cover the whole of Northern Ireland. However, there will be areas such the centre of the Mournes, and places like that, where we will not provide coverage because the need is not be there.

Dr McDonnell:
The Glens of Antrim.

Mr Murray:
We would hope to cover the Glens of Antrim and the coast road in the long term.

Mr Armstrong:
I have a problem with second generation mobile phones in Cookstown. That area is totally left out - in fact, most industries leave out the area west of Lough Neagh. You are covering the moving person and saying that it will be useful to the static person. The mid-Ulster area, Strabane and the Sperrins, has many static industrial areas. If Northern Ireland is to be a place where tourists, and residents, are able to move about the countryside, what is the point in sticking solely to the main roads? From a safety point of view you are supposed to be doing only one job at a time - you are not supposed to be doing two jobs. You are intending to cover all the main corridors for people on the move.

Mr Murray:
It is our intention to expand on that coverage. Mr Robinson said earlier that we have a 2G roaming capability with Cellnet. I am not sure what its coverage is like in your area.

Mr Armstrong:
It is hopeless.

Mr Murray:
I apologise, but I cannot control that network. We are putting bids into our head office for coverage of Cookstown and areas like that, and we will try to get another launch of sites. It depends on how well we get on with the sites that we have at the minute as to when we will be given more. The changes to planning legislation may delay our next phase of sites. If everything suddenly comes to a standstill, we will be asked why we should be given more when we cannot progress what we already have.

Mr Armstrong:
Why are you going for masts? Why not go for satellite?

Mr Murray:
That is a technical question. Basically, when you beam a signal from a satellite, it covers half of Europe. There are capacity issues. You can only get so many users on one frequency. If you fire it from a satellite, you are perhaps down to 10 or 12 users. When you limit the size that a mast actually covers, you can get perhaps eight or 10 per frequency. That covers a small area - a four-kilometre radius - as opposed to a satellite covering the whole of Europe. It is a technological issue. We may possibly move on to that in the future, but there is no solution yet.

Mr Robinson:
Given that Mr Armstrong represents the mid-Ulster area, I want to cite the example of our discussions with Dungannon and South Tyrone Borough Council. As I said in the presentation, we did not initially have plans to take the network further west than Portadown. Representatives from the council approached us and said that they were looking at the development of their local area and at the communication structure that we would be able to offer. They had plans for an industrial base in south Tyrone, and they asked how we could assist them. We entered discussions with the council, and I am pleased to say that we are continuing with those discussions.

We are pleased to highlight the fact that that council has positively engaged with the industry. I hope that we will be providing coverage from Portadown down to Dungannon and the surrounding area within the next six months. The coverage will perhaps not reach out as far as places such as Coalisland, but we will certainly include Dungannon, Moygashel and the surrounding area. As Mr Murray has said, we will eventually be taking the network further. We have been pleased to be involved in the consultation and proactive discussions with the council.

Mr Armstrong:
What age bracket are you targeting?

Mr Gurling:
I would not say that we are specifically targeting a particular age bracket. We are a new company. We will be offering much incredibly new technology. The sort of people that will be attracted to that in the early stages are going to be self-defining. They are going to be the people who, to use the marketing term, are "early adopters". They are the people who want the latest facility to be able to do the latest thing. They are also going to be business people, which, in part, accounts for our rolling-out to people in transit. That is what we are expecting. We are going to start off with a relatively small subscriber base consisting of those sorts of people and build out on the basis of the content and the facility that we provide. We are not targeting a particular age group.

Mr Armstrong:
It seems to be more of a leisure phone than a business phone - you mentioned the idea of seeing the goals in the football matches.

Mr Gurling:
Sorry, I was trying to give an idea of the difference between second generation phones and the sort of things that you will be able to get on a third generation phone.

Mr Murray:
From a business point of view, it would be useful because you will not need a telephone line to connect to your office. You will have a much faster connection than ever before. The dial-in aspect will not be necessary.

Mr Armstrong:
I have an office in mid Ulster. No mobile phone works in it.

Mr Murray:
This will give you broadband access as well as your mobile phone.

Mr Robinson:
When we bring the network to mid Ulster, we will ensure that your office is covered, Mr Armstrong.

Dr McDonnell:
You will have to go out to Coalisland. It is not enough to stop at Dungannon. Stewartstown is on the road to Coalisland.

Mr McClarty:
I hope that you have more success with your 10 commitments than Moses has had to date with the 10 commandments. I have a comment, rather than a question. We are almost in a catch-22 situation. Any area now must have a state-of-the-art telecommunications system if it is going to develop economically. Any region that does not have those advanced telecommunications systems will be seriously disadvantaged. I welcome your willingness to consult with local communities and representatives from those communities. That consultation process is the key to success, and I wish you all the best in the future.

Dr O'Hagan:
You mentioned that the new generation of mobile phones would allow people to have access to their bank accounts and other services. How secure will those connections be?

Mr Gurling:
Security is one of the facilities that can be provided much more easily on this sort of technology. I cannot give the precise details of how it will be provided, but there will be much greater use of pin locking and pin coding for different services. It is not something that you have to do, but it is something that you could do if you so choose. Because so much more data can be sent than the current technology allows, there is a greater facility for double checks.

We eventually expect to move a lot of commerce. We will not be able to offer that service unless we can convince consumers that a safety lock is available. I am happy to provide the Committee with more details, if that would be useful. I cannot begin to describe exactly how it works.

Dr O'Hagan:
My second question concerns the consultation process. You mentioned that you got a good response from one of the councils in Tyrone. What other councils have you met to date, and what sort of responses did you get from them and from the focus groups?

Mr Robinson:
The most recent meeting was last night with Castlereagh Borough Council. On Monday night we met Carrickfergus Borough Council. We have met other councils, and I can provide the Committee with further details. Unfortunately, some councils have declined our request for a meeting. We are disappointed with that response, because consultation is the way forward, and those councils are missing out on a great opportunity. I can provide details about which councils have declined.

Dr O'Hagan:
Have you met with Craigavon Borough Council?

Mr Robinson:
No. Craigavon is one of the councils that refused to meet with us.

Dr O'Hagan:
My final question follows on from Mr Wells's point. Health concerns are the key issue for representatives such as us. We hear from companies such as yours, and from researchers, that mobile phone masts are safe. However, we hear from other lobby groups and researchers that there are all sorts of serious health issues to be considered. How are we to square that information? How can your company convince me, and the people who live beside the mobile phone masts, that those masts are safe? Can you convince us?

Mr Robinson:
It is a process of education and learning from the outset, because it is a new form of technology and a new industry. The company has to go by the health reports that have been carried out on the issue. In the UK, we abide by the Stewart Report in particular. Prof Stewart concluded that the balance of evidence indicated that there is no risk from this form of technology's base stations but that more research into the handsets was required. That is one of the main aims and objectives of the new report that Stewart is about to commence work on. The Government announced it about a month ago.

On the concerns of local communities and elected representatives, we find that it is important to inform and educate people. All our technology abides by international standards. All our base stations conform to the guidelines that have been set down, and we will ensure that that continues to be the case. Furthermore, it is not a policy of Hutchison 3G to place base stations on top of schools or in the middle of residential areas. We know what the likely consequences of such action would be. To refer to Mr Wells's point, one of the benefits of consultation is that it helps us to identify possible suitable sites, away from residential areas, which will meet our technical requirements.

We are happy to provide you with more details. The National Radiological Protection Board carried out a survey into the specifics of locating base stations in schools. It chose seven sites in Northern Ireland, and a report has been made available. The report shows that the results all abide by the guidelines. We are involved in a process of education and learning. We are happy to undertake further research - the industry is funding reports. If the Minister here were to make a statement herself, or on behalf of her Department, on the issue, it would be helpful to the industry, and to ourselves as a company, in clarifying the situation on consulting with the community.

Mr Gurling:
The question of the community's confidence in the technology has been touched upon. We have talked about the International Commission on Non-Ionising Radiation Protection certificates. They are part of the planning application. One of our commitments is that the site will act within those limits. It is now our standard practice to employ an independent company to initially check the background emissions on any site; that company is empowered to go back and retest that site. That will not only prove to the local residents that there is a certificate to say that the unit will not break emission standards, but it will prove that the unit is currently not breaking those standards. That is quite a step. The regulatory body is able to check any site. We carry out such tests as part of standard practice, to show that we have confidence in what we are doing. It acts as a guarantee for the local community on the level of emissions. Other companies will increasingly follow that practice. We do it to raise people's confidence in the new technology and in the established guidelines.

Mr Murray:
The results are available on the Internet, so anyone can log on and see them.

Dr O'Hagan:
I accept what you are saying, and I do not wish to put you on the spot. However, in the area of research into health issues, are there not still too many unknown quantities to say with any real degree of confidence that the base stations are perfectly safe?

Mr Robinson:
I go back to what I said earlier. We have to go by the health reports. We have full confidence in Prof Stewart's detailed and comprehensive report. The industry has taken a lot out of it. To be blunt, there are emissions from every form of technology. For example, there are emissions from microwaves and televisions. The questions that should be posed and answered are what level the emissions are at and what guidelines are being adhered to. Our form of technology is adhering stringently to the guidelines, rules and regulations.

Mr Gurling:
There are many contradictory reports being published. As an industry, we are happy to fund additional research. The answer to your question is that we should never be afraid of further research to check the assumptions being made. It is of substantial benefit to reassure all parties concerned. The research should be ongoing, and we are happy to play our part in funding an element of it.

Dr O'Hagan:
You touched on changes in the planning regulations. How do you see those changes unfolding? From a local community or a council perspective, there are concerns that the changes in the planning regulations are going to have an environmental impact. Can you address those concerns?

Mr Murray:
Many of our sites are going through the current full planning system. We cannot forecast when they will be decided upon. They go before a council, and they are deferred for a site meeting, which is fine. People have the opportunity to see what the development is going to look like. It may be deferred for other reasons, and it may then be referred to management headquarters, which, in all my time in the industry, has never overturned the original decision of the planning officer. If it goes through all of those stages, it will have been delayed by about six months.

I am responsible for the roll-out in Northern Ireland. If we are unable to get new sites we will not be able to achieve roll-out throughout Northern Ireland. That has a direct impact. Under the current system of prior approval, the Planning Service has 56 days to say whether our application requires prior approval or whether it has been refused. The Planning Service is within its rights to refuse any of our applications and put it into the full planning process. That option has always been there. Whenever an application is submitted, it is prominently advertised in the newspapers. The application is more visible to the public under the present system. Once an application goes into full planning, it gets one line in among all the housing applications, and so, more often than not, people miss seeing it. The main impact on our company is that if the process becomes too slow we may have to ask ourselves whether it is worth all the hassle.

Mr Robinson:
It is important to mention that the nature of the current planning legislation in the two jurisdictions on the island is changing. The legislation in Northern Ireland is tightening, while the planning regulations in the Republic are being relaxed. Furthermore, in relation to the introduction of third generation telecommunications in the Republic, the Irish Government are currently auctioning licences. Bids have to be in by 31 March 2002, and we expect to hear who the new operators will be by the end of the second quarter. Hutchison 3G will be putting a bid in. Given that 3G technology is about to be introduced into the Republic, and that the planning regulations there are to be relaxed, coupled with the facts that 3G is already in Northern Ireland and the regulations here are to be tightened, we are somewhat concerned that the Republic is catching up - which would be to the detriment of the network roll-out and coverage here in Northern Ireland.

Mr Gurling:
The key issue for any business is certainty. If the consultation process takes longer, we can live with that. However, if it were to become unpredictable, and suck in large amounts of resources to achieve very little, then we would have to look at it again. We are looking for certainty.

The Chairperson:
Why are the power levels of 3G less than those of the previous generation?

Mr Murray:
That is a very technical question. I do not know whether I can give you the right answer or not.

The Chairperson:
Does that say something about the previous levels?

Mr Murray:
No. As I understand it, it is basically about managing the system, which was previously operated on different frequencies. All the sites will operate on the one frequency, whereas adjacent second generation sites had different frequencies and, therefore, did not cause the same interference. The cells breathe as more people jump onto the site. As the site develops a capacity problem, it will reduce in size and some people will be transferred to the next site. That signal has to be contained much more to avoid interference.

Mr Robinson:
We would be more than happy to provide you with written information on that subject.

The Chairperson:
Thank you very much for your interesting submission. Should any further queries arise, we may write to you about them.

13 February 2002 / Menu/ 20 March 2002