Last month Yes announced it had taken a 50 per cent equity stake in financially-troubled Phone People and issued optimistic statements that the two companies would be working closely together.

However on March 1 the deal had collapsed. Phone People joint managing director Amjad Baig had effectively terminated his involvement. Yes managing director Colin Jones (Cont. P2) admitted to

Mobile News his company had not realised the full extent of Phone Peoples battered finances. At the same time bailiffs had moved on several Phone People outlets to reclaim rent arrears.

Jones spent the weekend of March 3 trying to raise finance to salvage the deal approaching without success individuals and potential investors such as The Carphone Warehouse.

At the time of going to press (March 14) Jones was optimistic the venture would still proceed. He was still locked in talks with potential investors over the future of The Phone People venture and was unavailable for comment.

Yes Telecom commenced trading in the North West last September after receiving one of 33 licences from Vodafone as an airtime service provider.

This followed legal action by Prima Cellular Accessories over a debt of 10000. The Sheriffs men labelled goods to be seized within weeks should Fone Range continue to withhold payment from Prima.

Primas director Richard Ackroyd said action was taken after Fone Range failed to meet new dates for repayment after agreeing a repayment schedule.

Its a shame this had to happen said Ackroyd.

I wish that (Fone Range founders) Jay and Vimal (Pau) could see some sense and just pay the debt without us having to go through all this hassle. We are insured against the debt anyway. But after Fone Range agreed to pay the debt we had to wait and see whether they would deliver. Now that they have failed to meet the newly agreed repayment dates we had to take action said Ackroyd.

The Pau brothers sold off the Fone Range brand to Elite earlier this year to try and stabilise their ailing group of companies last year.

But worse could follow as other companies within the industry also decide to follow Primas example.

Dextra says it is owed a large sum of money by Fone Range. Dextra head of credit control Nick Ellis admitted that action may be taken shortly.

I dont think Sheriffs officers would be able to lay their hands on enough goods to cover what they owe us. We are in discussion as to what to do to recover the debt Ellis concluded.

Fone Range management was unavailable for comment.

The move follows One 2 Ones lead to raise the entry-level retail price of pre-pay mobile to 70 a fortnight ago.

Vodafones decision is now raising speculation that the other two networks Orange and BT- Cellnet will also shortly announce similar moves in the coming weeks.

Orange maintains it is reviewing the situation. BTCellnet said they too are reviewing the situation but had no announcement to make.

Network activation bonuses will be reduced by a further 12 in addition to a 6 reduction implemented on February 1.

Vodafone expects the price of its entry level Pay as you Talk packages to be around 70 in line with One 2 One.

The All in One mobile phone packages will be withdrawn from May.

Reaction to the move has been positive from the trade.

Data Select boss Peter Jones says it should have happened sooner.

It should have been done six months ago. It cuts out the non-traditional routes to market and puts an onus back into the lifeblood of this industry and the independent dealers. I agree that some dealers have been doing greater volumes as a result of pre-pay.

But they have suffered badly. I think what well see are more virtual network operations setting up shop and distribution companies along with retailers will have to re-focus.

But Jones argues that the networks need to invest some of the savings back into the trade if the initiative is to really work.

Id like to see the operators put some of the savings into greater development-training programs to create loyalty. It will be needed because there will start to be more content provision and the handsets will start to get more complicated. Dealers will need to be trained in those specialist areas said Jones.

Fone Logistics MD Ian Gillespie was equally enthusiastic at Vodafones decision.

The subsidy had to come out of pre-pay to stop box breaking. It has created a false market but hopefully now this decision will increase sales of contract phones he said.

Gillespie feels the move will have little if no negative effect on his business.

It wont affect our business negatively. We hardly do any pre-pay. It probably accounts for about one percent of our business because we dont focus on it and our sales people are dis-incentivised to sell it.

All the networks have done is made the box breakers a lot of money with pre-pay.

This needed to happen because everyone says it is the right thing to do but it takes brave men to do it first and stand by it.

In the coming months I expect to see a decrease in contract acquisition commissions too because the feedback said Gillespie.

Im getting from the networks suggestions theyll be more focused on revenue streams and customer retention rather than acquisition.

Carphone Warehouse marketing director Jonathan Hook is confident the decision wont have an adverse affect on sales.

Pre-pay has been great for customers but the balance is changing and the handset value has to be reflected because customers just dont understand just how much these mini computers cost.

People who want to get on to pre-pay will get on and raising the price from 20 to 60 or 70 is not an insurmountable price barrier. Im sure the networks will ensure that there is greater value in the box one way or the other so the customer doesnt lose out.

Cellstars European CEO Keith Curran said: We want to assess in the middle to long-term where the market is going and what CellStars options and opportunities are in that marketplace. It is very important for CellStar as a major player to have a key role in every region.

Consultants Andersen are completing its findings and expects the results to be available within the next couple of months.

We will be talking to other key players once we know factually exactly where we are and what our new strategy is confirmed Curran.

The target is equivalent to a growth rate of about twice that of the world market which is what we have achieved during all the previous years said Sagem CEO Pierre Faurre.

The high-growth strategy was unveiled in Paris last week at the launch of new high-tier products topped by the WA3050 smartphone developed in partnership with Microsoft.

Sagem also anounced it expected to appoint more distributors. Previously most of its sales have been through network operators.

Another move will see production of mobile phones in two factories in France and Eastern Europe.

On show at the Paris event was the 3000 range of mobile phones Sagems smallest and lightest to date. Sagem also produced a watertight shock and dust proof phone for outdoor use. It will feature WAP and GPRS altimeter barometer and a mini flashlight.

They will cost 2250 (exVAT) for a table of 10 for the event to be held at the Hilton on Park Lane March 15.

Up to five parties are in the running to buy the base RSL Com the fixed and mobile provider wants to concentrate on the business-to-business sector and its new CP2000 commission plan to dealers (see story P34).

UK and Benelux MD Barry Mowbray told Mobile News:

We have not yet made a final decision as far as the consumer base is concerned. We are reviewing all the options that are open to us.

RSL Com staff were made aware of the situation in a series (Cont P2) of meetings last week.

RSL Com paid around 7 million for Advanced Communications 250000 customers.

A year ago Mowbray said:

Advanced epitomises whats best about independent service providers. Despite operating in a notoriously volatile industry Advanced has exceptional customer loyalty. Like RSL Com its success is based on selecting the right solution for each individual customer and being more clever than most when it comes to customer service. This union supports RSL Coms objective as an integrated communications provider to meet more of the needs of our customers.

The Mobile Alliance was formed to offer independent dealer a branded high street presence and access to marketing advertising and branding potentialities that are normally enjoyed by the multiples.

The Carphone Warehouse boss Charles Dunstone told Mobile News:

The Carphone Warehouse Group can confirm that we are currently investigating a number of stock discrepancies at the Warrington

Superstore. The internal audit department are interviewing some of the personnel working at this store and some people have been suspended whilst the investigation is completed. The Warrington store is trading as normal.

The suspended Warrington staff were understood to have been using newspaper money-off coup-ons discount vouchers and credit vouchers to buy equipment such as palmtops and phones from the store which were then allegedly sold on for personal gain.

The police are involved in the investigation.