n010  0739  26 May 80
 
BC-TELEMAT
By PAUL LEWIS
c. 1980 N.Y. Times News Service
    PARIS - Like the ancient Greeks, the French seem to always have a
word for new developments.
    Telematique is the name they have just invented for what they expect
will be the next stage of the computer industry's development: the
introduction into offices and homes of inexpensive terminals linked
by telephone lines with central computers. The terminals can be used
to find phone numbers, check the time of the local movie, transmit
written messages and even report burglaries secretly to the police.
    Using every carrot and stick at its disposal, the French government
is now trying to push its electronic companies into the forefront of
this emerging new market. Industry Ministry Andre Giraud calls
telematique ''a national priority.'' President Valery Giscard
d'Estaing says it is in high-technology areas like this that France
must compensate for its lack of oil by ''learning to export its brain
power.''
    Telematique has thus joined the list of advanced new industries that
the French government hopes will eventually replace shipbuilding and
other decaying sectors as the mainstay of the French economy. Other
priority industries on the list include nuclear engineering,
airplanes, rockets and satellites, food processing and virtually all
aspects of the electronics business.
    France's plan for grabbing a world lead in popular computers rests
on more than a decade of strenuous government efforts to establish an
indigenous computer industry. It is combined with a crash program to
expand and modernize the national telephone network, which has
increased the number of subscribers from six million in 1974 to about
15 million currently.
    The government plans to use its monopoly control over the telephone
network to persuade subscribers to accept the telematique terminals,
which consist of a typewriter keyboard attached to a television
screen. When a user taps out the right code, the screen flashes back
a variety of information stored in a central computer. The terminals
themselves will be free, but subscribers must pay each time they ask
for information.
    A trial run for the system, involving 250,000 subscribers, is
scheduled for next year. But already the French post office, the
agency administering the system, is encouraging subscribers to sign
up by raising the price of paper telephone directories by 500 percent.
    The French are planning for or already trying other computer-based
services, such as one that allows subscribers to transmit
''electronic letters'' and one that can ring an alarm in the police
station if the subscriber touches a button on his wrist.
    The government sees low prices as a key element in developing a
successful telematique industry with export potential. The post
office has therefore set low target prices for each piece of
equipment. A household terminal should cost under $100, for example,
while letter transmitters are to sell for between $500 and $300
depending on capabilities, or between a fifth and a tenth of what
such machines cost today.
    To help its electronic industry adapt to telematique, the government
has earmarked $100 million over the next two years. Much of this
money goes to small, entrepreneurial software companies working for
the country's five major electronic companies, Thomson-CSF,
    CII-Honeywell-Bull, Saint-Gobain-Pont-a-Mousson, CIT-Alcatel and
Matra. Together, these big companies dominate the telematique
business.
    But besides aid, the government is encouraging its electronics
industry to regroup and strengthen its technological base by buying
American expertise. Earlier, it had rejected an attempt by Thorn
Electrical Industries of Britain to buy France's leading television
rental company, Locatel. It ordered Thomson and CIT-Alcatel to take
it over instead.
    Michel Walhain, president of Thomson-CSF, acknowledges that he did
not want to buy Locatel, but the government argued it could help
Thomson lease telematique equipment. ''The government is a big client
of ours, so we obliged,'' he said.
    A more spectacular merger occured last month, when Saint- Gobain,
which already owns 20 percent of CII-Honeywell-Bull, bought into
Olivetti, the big Italian office machinery maker. The deal, which
also required a nod from the French government, could enable the
country's telematique equipment to be sold through Olivetti's
worldwide distribution network.
    Meanwhile, French electronic companies are forming
technology-sharing joint projects with American companies, which is
usually the only way U.S. electronics concerns can get into France's
protected market. Saint-Gobain has already joined forces with the
National Semiconductor Corp. to make microchips, as have Matra and
the Harris Corp. of Florida.
    However, to many observers, the French telematique market is
starting to look crowded, with five major French competitors.
Moreover, for all their virtuosity and stubborn government backing,
France's electronics companies appear increasingly hemmed in by the
fast-growing interest in European telematique that other bigger
groups are showing.
    Looming as potential competitors are such giants as the
International Business Machines Corp.; West German-based Rank-Xerox;
the Exxon Corp., which is fast diversifying into the computer field,
and West Germany's Volkswagenwerk, the big auto maker that recently
bought Triumph-Adler, an office machinery concern.
    
    
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