View from City Road: Ringing up confusion

Vodafone, the mobile phone market leader, is starting a pounds 7m campaign on bank holiday Monday to advertise a new digital cellular telephone service allowing customers to irritate non-mobile owners in several other European countries.

It also looks like a shot across the bows of Mercury Communications, whose long overdue One-2-One mobile telephone service - also digital - is poised for launch next month. Should Vodafone be worried?

The two services are, for the time being at least, worlds apart. Mercury's is cheaper, aiming to attract the man in the street, and it is sticking initially to the M25 corridor area.

But One-2-One trials have been patchy, with a significant number of guinea pigs reporting 'black holes' or lost and aborted phone calls - scarcely a vote winner in the important City marketplace.

Vodafone offers 90 per cent UK coverage but is mainly intended for businessmen who are already wedded to the idea of a mobile telephone.

The problem for both companies could be confusion in the market. Vodafone and its rival Cellnet have already successfully launched low cost 'mass market' versions of their existing analogue mobile telephone services.

The variety of tariffs and types of service on offer from each player could prove a big obstacle to developing a mass market. Mercury, with several hundred millions of pounds riding on One-2-One, cannot afford a flop - but it must get it to work properly before the advertising onslaught begins next month.