Hutchison gets a taste of US rural experiment with its Western link

The isolated town of Regent, population 267, lies in the sparsely populated southeast corner of North Dakota in the United States. The nearest other settlement is 48 kilometres away. Yet this small community has its own cellular-phone network, one in which Hutchison Whampoa has a small stake.

The Hutchison interest comes through its 5 per cent holding in Western Wireless, a US company with more than a million mobile subscribers across the US. The Regent network appears a fairly insignificant and potentially costly affair, given the number of potential customers. Western has 90 cellular licences in 90 cities and towns across the US.

But that is not the way Western Wireless chief executive John Stanton sees it. To him, if the Regent experiment works, the company can have a crack at providing rural services like it across huge swathes of countryside and challenging the local fixed-line operators for business.

Last month Western launched CellularOne in Regent. This is not a 'mobile' service but a residential cellular service. Customers use their standard home handsets but the link from home to the outside world is wireless. In the jargon, it is known as 'wireless local loop' because it replaces the copper, under-street cables normally needed to link homes to the network.

In this way, Western can put one cellular base station in the middle of the town and connect every home virtually instantaneously. This is particularly attractive for people with homes off the beaten track, where they would have to wait possibly months for a wire connection to get to them.

Western's clear target is taking people away from the local fixed-line telephone operator, or at least offering a choice of local provider. The company is charging US$14-$15 per month to rent the cellular base-station unit.