His denial comes in the face of accusations from named dealers that Orange has been allegedly tempting small and medium-sized business customers away from their regular dealer with offers of free and cheaper equipment and accessories and reduced and free connection charges.

One of the dealers complaining about alleged poaching is Colin Runham of Pagers in Wallington

Surrey. He accused Orange Direct of stealing an account: Highway Surfacing (HWS) by offering a catalogue of free phones and fitted car kits in exchange for them signing a two-year contract.

Runham last year wrote to Orange claiming: We discov-(Cont P2) ered HWS had been approached by Mr Carmino Martucci from Orange Direct Sales.

Although being told Pagers looked after the account and were happy with Orange and were upgrading all 5.1 (handsets) to 702 (handsets with car kits and vehicle installs) he insisted on getting involved and offered all this equipment plus labour free of charge on the agreement HWS sign for a further two years. Of course they agreed. We find this not only unacceptable but irresponsible business practice. We estimate our commission equipment and labour loss to be in the region of 1680.

Jones told Runham this case involved a routine cold-calling exercise and that Orange had no prior knowledge that HWS was a Pagers customer.

Jones told Mobile News:

Theres no way that we are taking that line or that kind of thing is any part of our strategy. It would be crazy for us to act in that way. If any dealer has examples I would be delighted to take them up with the dealer and address the issue said Jones.

We generate over 500000 new customers a month by means of a vast distribution and sales structure. If I believed that I could generate that amount of business and never have a situation where a direct sales person came into conflict with a dealer or a dealer found himself at odds with one of our retail shops I would be completely naive.

Buckland says that asking the dealer to assume responsibility for usage by a customer over whom the dealer has absolutely no control is unfair trading.

In his complaint to Oftel he states:

It is unfair trading to advertise a product that states the end user has no usage responsibility but to pass that usage obligation onto a third party. We find it totally unacceptable that a product that is sold as a stand alone no ties non-contractual phone should have any form of clawback. This is simple box selling. If we buy a box containing a cordless phone or an accessory we are not asked to indemnify its destination or usage in any way. Why should we be asked to do so on a pre-pay mobile phone?

Bucklands dealership has 13 retail outlets and has been established since 1986. They have an annual turnover of around 4.5 million.

He sells around 2000 handsets per month of which more than 1000 are pre-pay across all four networks.

He further points out to Oftel:

For the past three years we have been a Virtual Service Provider offering BTCellnet and Vodafone monthly billing service. This part of the business was sold to BTLumina on 31 August 2000. We purchase pre-pay mobiles from (Cont P2) whatever source has supplies as we are not able to buy them directly at a competitive price. We have been purchasing through distributors who recently have been making us sign undertakings reflecting those imposed upon them by the networks. Copies of the documents to these distributors are enclosed.

These penalties vary between 35 and 60 for either non-activation or non-usage within 90 days of activation. Whilst we can accept some responsibility for activation we cannot ensure on-going usage. We can accept that the competition is tough and margins are low but we ask a level playing field.

The fact that the networks choose to subsidise this product is a situation over which we the dealer have no control therefore it is unfair for us to have to accept responsibility for the actions of the networks.

The network admits they offer a substitution in terms for clawback to the supermarkets. It is our belief the same no clawback alternatives should be offered to all sellers of the product. We find it hard to believe that supermarkets will accept this type of clawback situation for exactly the same reasons as the dealer channel. If these terms are not applied or indeed enforced as they are in the dealer channel then again it is our contention this is unfair trading.

The money will be used to fund acquisitions in Europe and further afield and develop the Value Telecom brand and new Viva internet portal. The minimum retail application will be 1000.

Current valuations make The Carphone Warehouse worth an astounding 1.82 billion. The company will still be owned substantially by chairman Charles Dunstone (47 per cent) chief operating officer David Ross (33 per cent) and operations director Guy Johnson (around 14 per cent).

This makes the three Carphone Warehouse directors worth respectively 844 million 600 million and 254 million.

We decided in January and February the time was right to go for an IPO (Institutional Placing Offer) Ross told Mobile News.

It is no secret that we have invested a lot of money in Europe. Our focus is going to be rolling out Europe. As we enter into this new arena of new technology it is in the businesss interest to retain maximum flexibility which comes through having cash. The growth of mobile for voice telephony is well-established and it still has a long way to go. In addition we are now at the very start of the growth of mobile for (Cont P2) data and internet services. As fast as the mobile market grows the sale of replacement upgraded and second phones is growing faster. These trends coupled with the growing consolidation of mobile network operators mean The Carphone Warehouse is well positioned to expand both its distribution chain and the services we offer Ross said.

It has taken us 10 years to build a business. Our advisors tell us we are the sort of business the market is looking for. We will still retain majority ownership and day-to-day control but will have cash resources to develop the next stage. All existing UK employees have got existing options further options will be distributed. Internally it is business as usual Ross added.

Ross said that the speed of The Carphone Warehouses growth over the last 18 months had led to a small amount of debt on the balance sheet.

But traditionally The Carphone Warehouse has been a-debt free business.

We want to make acquisitions. Having the cash adds a different dimension. Networks and phone manufacturers will have the comfort of knowing they are dealing with a highly resourced business.

Charles Dunstone added:

There is enormous potential in the mobile market. With the benefits of the proceeds to the company from the flotation The Carphone Warehouse can take full advantage of the opportunities open to us not just in distribution but also in mobile virtual network operation and in mobile data and internet services. As we come to the market we want to ensure that customers who want to share in our future as well as our employees can take part in the offer.

Shares are to be offered to institutions employees and residents of the UK Jersey and the Isle of Man.

The Carphone Warehouse currently has over 800 stores in 14 countries in Europe and has recently agreed to acquire up to a further 98 retail locations in Germany. Sales are around 698 million.

The prospectus is due at the end of June with pricing allocation and trading of shares planned for July.

Information leaflets are available now in all The Carphone Warehouses UK shops.

There is a Share Information phone line and a Share Information page on The Carphone Warehouse website.

This follows the news that the company is to pass handset production to Singapore-based manufacturer Flextronics who will take over Ericssons UK factories in Carlton-in-Lindrick and Scunthorpe.

In light of a significant change in the world market for mobile phones we have decided to fundamentally change the setup of our business said Jan Wareby executive vice president Ericsson Consumer Products Division. (Cont P2)

The alliance with Flextronics will enable us to achieve economies of scale and volume flexibility. We are committed to remain a top player in mobile phones With this new set-up we respond to a much tougher business environment and we create a sound basis for long-term profitability Wareby added.

Philips Consumer Electronics MD George McPherson said the decision by Ericsson to outsource all of its mobile phone production was logical.

The market has become more competitive and you need greater economies of scale to remain competitive and profitable.

The biggest difference with Ericsson as opposed to ourselves and the likes of Nokia who also outsource some production is that they have decide to outsource all their production said McPherson.

If you need to scale down the volumes it leaves spare capacity that cant be used for anything else and this can lose you money as the overheads are very high.

Where you outsource the production it is far easier to scale the volumes either way.

If you need extra capacity the company makes a few more lines available. When you downscale they just use the line for something else because they quite often have other things going on at the same time he added.

Peter Jones MD of Ericsson-appointed distributor Phones International and Data Select said:

We dont see a downside. It doesnt affect the brand which remains very strong as do sales. It was the right decision. In fact I think they could have done it a year earlier. Ericsson have always been sales and technology led.

Everyone else does the same thing anyway except for the fact that they do it to a lesser degree. Im quite upbeat delivery schedules will be improved due to the fact that these contract-manufacturing companies will want to deliver.

Ericsson needed to streamline the business. I congratulate them and feel chuffed that theyve done it. They have some way to go to catch up Nokia. But the business remains unaffected.

In fact the savings that they make are likely to be reinvested in increased R&D and sales and marketing and that can only improve the level of offering and extra support to the market .

An announcement that the two companies have drawn up Heads of Agreement is expected by Christmas as a prelude to a full merger sometime during the first three months of next year.

There is no plan for any cash to change hands. The merger will be a share swap exercise engineered by Ora and Kondors venture capitalist backers Granville Baird (Ora) and Friends Ivory (Kondor) who are expected to eventually float their equity in a public offering.

The two firms are now in preliminary talks to establish areas of common ground.

Ora managing director Ken Jacobson told Mobile News:

At this stage these discussions are preliminary and no conclusive and binding decisions have been made by the boards of either company regarding the form of any future co-operation or alliance.

It is understood Jacobson will be chief executive of a combined 40 million turnover Ora/Kondor operation. Ora founder Malcolm Hanson and Kondor founder Malcolm Bartlett will continue to be non-executive directors of a merged operation.

Ora and Kondor are similar accessory companies in that large quantity of shares of both companies are held by venture capitalists

Both organisations have large trade accounts. Ora supplies Orange. Kondor deals with The Link and BTCellnet. The Carphone Warehouse is a major customer of both. Such large trade customers are expanding and require a more value-added services which a merged Ora and Kondor would be better placed to support.

No detailed integration plans have yet been drawn up regarding what a merged organisation would be called.

Skinner ITVs highest-paid comedy act is the latest in a long line of major celebrities to present the Mobile News Awards. He follows Rory Bremner (1995) Lily Savage (1996) Bob Monkhouse (1997) Ruby Wax (1998) Paul Daniels (1999) and Jim Davidson (2000).

Avenir which was in unsuccessful takeover talks with Banner Telecom last year is quoted on the French Stock Exchange at E1.2 billion.

The four networks are delighted with this move and have fully supported the acquisition said CMC managing director Geoff Walters.

Avenir was keen to expand into the UK and CMC offered the perfect partnership through schemes like the Mobile Alliance.

Also the wide range of affinity deals that provide the company with extended routes to market their products and services were of key significance.

Dealers will benefit from stronger buying power. Avenirs investment in our UK operation will mean more security and opportunities for CMC and this will have a positive impact on our dealer base. (Full story P14).

Some dealers believed the extra commission was only available on connections to Orange tariffs and not from conversions to Orange Value Promise.

However Orange has confirmed that all new connections regardless of tariff apply.

The increase is to bring the commission levels in line with those of our competitors. The increase is applied across the board to all new connections said an Orange spokesperson.

The news comes only weeks after Orange raised commission levels on handset upgrades.

Negotiations between RSL COM and Vodafone concerning the disposal of the remaining 30 per cent of its consumer base are understood to be nearing conclusion and an announcement is expected in the next 60 days.

The total number number of consumers involved in both sales is believed to be in the region of 100000. A similar number of business-to-business customers will remain with RSL COM.

Over recent months RSL Coms consumer base acquired mainly as a result of the companys purchase of Motorola TelCo some 30 months ago has sat uneasily in the portfolio as the companys business-to-business focus has become steadily more defined.

The sale signals a refocusing by RSL COM as a specialist business services provider. It follows acquisitions earlier this year of two of the UKs leading business-to-business ISPs (Internet Service Providers) REDNET and Voyager. RSL COM will now concentrate on supplying integrated fixed voice mobile data Internet and network services to the business market.

RSL COM will invest money from the sale in ramping up capacity on its 1200 km UK fibre network. The company is also preparing to rollout a broadband DSL Internet product to small businesses across the (Cont P2) UK in the coming months and launch a range of new value-added internet portal services to the corporate market including voice over IP and IP private networks.

Explains RSL COM UK MD Barry Mowbray.

RSL COM has built an extremely powerful position supplying fixed voice mobile data networking and internet services to business customers – a one-stop package that no other telecommunications company has been able to offer.

With the sale of almost three-quarters of our consumer business we can focus more on developing and marketing a stream of leading edge IP-based services to existing and new business customers.

We will continue to provide the latest mobile technologies and award-winning customer care to our remaining consumer mobile customers. RSL COM has a solid and profitable business-to-business customer base.

One of our main drivers for the next year is to raise this profitability even further by leveraging our strengths in bundled solutions and customer retention.

Says RSL COM UKs group sales director Matt Crabtree

We are delighted to have done the deal and got this phase of our life over with. Being able to devote all our time and energies to our business accounts will mean a huge amount to RSL COM. It has been extremely challenging for us to look after the two breeds of customers.

This development will allow us to sell and support the broad range of business services we offer properly.

We now understand the fundamental difference between the business customer and the consumer but we have only come to understand it since we started to deal with both kinds of customer on the acquisition of Motorola Telco. Its a phenomenon you can only understand when you are dealing on a day-to-day basis with the needs of both sets of people. It has been tough for us as an organisation but it is the business customers with whom we really feel we can make a difference adds Crabtree.

The message to independent dealers is that this deal enables RSL COM to focus on the opportunities presented by the business-to-business market.

We can now offer a truly dedicated and differentiated support for their business customers. Everyone has been preaching for the dealer community to embrace the business market.

More than that we believe they have to look to bundling other products and services together be they fixed line internet related or data networking services.

Its about the peripheral support on offer as much as the raw product itself said Crabtree.

Gary Sheppard who came to RSL when the company bought Advanced Communications 15 months ago and is understood to have been closely involved in the deal as has already been reported is leaving RSL COM.

Says Sheppard

At the moment Im looking forward to doing nothing. I hope to continue in the mobile industry at some point but I want to work for the right company at my pace.

Ive supported RSL since they bought Advanced. I hope they achieve their aspirations and believe they are set to do so. Personally though the time was right for me to move on.

Though my relationship with RSL wasnt a marriage made in heaven neither was it a bad one.

We had slightly different ideas about how the business would progress. That doesnt mean they were right or I was right. It just means we had different opinions which is what business is all about adds Sheppard.

Richard Dixon head of consumer and select marketing at BTCellnet told Mobile News:

We are pleased that we managed to keep RSLs customers which are generally of good quality in the BTCellnet fold.

As RSL COM want to focus on the business market our taking on the consumer element of their base is good for both sides. We will be continuing to work with and support RSL COM in their business endeavours.

We have a communications plan in mind to tell customers of the change in ownership that has taken place.

This is a legal obligation but we want to make the migration as smooth as possible so well be trying to make sure that the tariffs remain consistent for example explains Dixon.

This deal has come about because RSL wants to focus on the business market. It is not us going out and being predatory and has been driven more by RSL COM than it has been by us.

Having said that I would make the point that we are happy to take these RSL customers on board concludes Dixon. It is good business all round.