Off the beaten tracks

Railtrack’s telecoms upgrade will create more lines of business for Racal-BRT. Melanie Tringham tells how

Railtrack’s forthcoming £10bn investment in the rail network is not the only capital being spent on the railways. The telephone network that carries all the voice and data between stations and signalling centres is about to have an overdue upgrade.

The network’s new manager, Racal-BRT, is spending £100m to bring the network into the late 20th century. By this time next year it will have caught up with its contemporaries and provide volumes of capacity for cash-hungry Racal.

Railtrack’s telephone network is over 100 years old, but was once considered revolutionary. It was the first of its kind in the UK, predating the first public telephone networks in the late 1800s.

By 1995, lack of investment meant it was far behind public telephony in technical terms. It is still dominated by copper wires and electromechanical exchanges (switches in industry jargon) more suited to an industrial museum.

Racal `bought’ British Rail Telecommunications in December 1995 for £133m. The big advantage is the network’s spare capacity: 80% of its 11,000km of cable is not used, and some of that includes thousands of kilometres of optical fibre track.

Railtrack retained ownership of the network infrastructure which it leases to Racal. Racal provides the telephony service Railtrack needs and bills it for the service.

In return, Racal must upgrade the network, but it has complete freedom to use the spare capacity as it wishes. This means leasing it to other major carriers, such as Energis and Mercury, and using it for its own purposes to win other contracts from major businesses.

`There’s a good fit in the synergistic benefits,’ says Bob Germon, major project director at Racal-BRT. `BRT has telecommunications networks that run the length of the country and we’re looking to exploit them.’

BRT’s network turns over around £185m; it increases the turnover of its holding company, Racal Network Services, by 66%. The division produces margins of 14%, which is a valuable cash generator compared with the group’s overall 5% margins.

Investment over the next two years will replace the old copper wires and switches with optical fibre and digital exchanges. Racal expects to spend £90m on the transmission network, in a programme called Project Beacon. Already £38m has been authorised on synchronous digital hierarchy transmission equipment from GPT and optical fibre from Pirelli. The rest is waiting for approval, and a further £10m is soon to be spent on switches.

`What you have is a network which has the widest range of any network in the whole country,’ says Germon. Racal is likely to need it. Racal-BRT has a near monopoly on Railtrack business, but now Railtrack is a private company it can choose its supplier. So Racal-BRT could lose the work to larger operators offering cheaper prices.

The key to Racal’s investment is to provide the most modern service available to Railtrack, so that when it competes with companies such as BT it will be competing on price.

As insurance, Racal has taken out an international operator’s licence to give it a foothold in the outside world and to keep pace with the rest of industry. `We are looking very closely at how we can interlink our network with those overseas, and cash in on the huge upsurge of international traffic,’ says Germon.

To complement this strategy RNS is striking deals with international operators which might see parts of RNS forming joint ventures with US operators keen to get into Europe, before someone turns its own acquisitive eye towards the whole business.

However, the future of Racal-BRT does not stop with building its base network. It has plans to experiment with new technologies and take advantage of convergence of information technology.

One of the newest areas is customer information terminals at railway stations. The electromechanical rotary boards dating from the 1970s which detail departures and arrivals, are to be replaced with customer information boards using light-emitting diodes.

`There are some very interesting opportunities coming up where train franchises are being taken on by the owners of bus companies,’ says Germon. The boards will tell the customer if there is a bus connection after a train and indicate exactly how late the train will be by interpreting triggers from track signals. `Instead of saying a specific train is delayed,’ says Germon, `you will be able to say where this train actually is.’

The first deal is expected soon: Racal-BRT will manage an information service by collating the track information and managing the manufacture of the LED board.

Racal is also trying to use its new acquisition to move into track signalling – one of the biggest targets for Railtrack’s £10bn investment. Railtrack expects to spend around £2bn on signalling, ranging from replacing ancient signal boxes to rewiring signal transmission.

Racal-BRT is negotiating with Railtrack to transfer non-dedicated signalling networks to the telecommunications lines. It is also experimenting with transmission-based signalling systems to replace wire systems for new tilting trains travelling at up to 140mph, which is too fast for conventional systems.

The technology is only now being developed for the West Coast Main Line, but it is the sign of things to come, which Racal will certainly want to be part of.