Falling margins on paper vouchers are being blamed for the decision which will see the customer base transferred to Caudwell Group-owned 20:20 Solutions.

Project Telecom managing director Tim Radford said:

The margin in pre-pay vouchers has been disappearing for some time now and the market has been under increasing pressure for the last two years.

We got into pre-pay in 1998 and over the years have made a lot of money. It has helped us build our corporate business operations and this is where we are going to concentrate.

We decided to call it a day while we were ahead and while it was a profitable business.

In order to maintain continuity to our customers and ensure that lines dont go dead at the end of September we are transferring the business to 20:20 which will take over from October 1.

Project Telecom is keeping its electronic top-up and Sim-free businesses.

Although PT Distribution had a 250 million turnover it only generated a tenth of that in profit.

The PT Distribution management team is to be integrated into Project Telecom. Chris Tombs who ran the division for three years becomes managing director for the indirect channel.

PT Distribution had already been forced to make cuts in June this year when it made 50 staff redundancies. In March the operation had 146 people. Currently there is a workforce of around 75.

The 50 staff who retain their jobs will be moved across into Project Telecoms business operations or will work on the e-top-up and Sim-free businesses.

The company is also retaining PT Distributions buildings and assets.

Radford added: We are closing the operation ahead of transferring it to someone who can make a better go of it.

Our core business is corporate services. We have been thinking over this move for the past 18 months as the screw has been tightened and tightened.

The networks have changed the agenda. They have moved away from pre-pay and are now putting the emphasis on higher ARPU and retention and getting quality contracts.

We are a corporate business enterprise. Today we are a niche service provider with 175000 business customers. We are looking to get this number up to 500000 subscribers by 2005. We see this as an opportunity to own the business market as far as possible and be the centre of excellence.

Radford says now only a heavyweight firm can really extract benefits from voucher distribution.

If you have the scale like the Caudwell Group and you have a highly efficient and focused operation that has massive economies of scale then you can make money from the small margins. But it is extremely hard for anyone else.

Although the operator market is a crowded one we believe there is space for a MVNO that concentrates entirely on business users. Not one of the existing networks is working for the business customer said Bob Denton business development director for Aerofone.

Aerofone will offer four bundled tariffs which it claims will be on average up to 25 per cent cheaper than Vodafone and O2. A number of support services such as AeroBill Lite let the business user access and analyse their bill. Overnight handset exchange will also be offered.

Subscribers will also get cheaper domestic calls.

Calls to Virgin T-Mobile and fellow MVNO Fresh will be considered on-net calls.

Denton says the dealer channel will play a significant role. Aerofone will pay dealers commission on the actual airtime their customers spend as opposed to the ARPU they generate. Dealers will also receiver commission for sign-ups.

Dealers are being told to raise the ARPU of their customers. But ARPU is going down because the cost of calls is reducing. If dealers are being rewarded on increase in ARPUs this is being a bit tawdry.

Dealers will receive commission on the amount of minutes and connections that their customers use.

Aerofone also launched a distribution division which offers a pre-pay e-terminal service as well as a calling card which gives cheap calls.

But rival telecom brands Nokia and Ericsson declined 14 per cent and 49 per cent respectively.

Nevertheless Nokia is ranked number six in Interbrands ranking of 100 of the worlds most valuable brands. Samsung comes in at number 34.

The list is topped by Coca Cola followed by Microsoft IBM GE and Intel.

Companies still wishing to enter can obtain entry information and forms from us by calling 0207 704 7440.

The Mobile News Awards will be presented on March 27 at a gala dinner dance at the Hilton on Park Lane.

There are a limited number of resticted view tables available.

Person-to-person figures for June reached 1.3 billion up by 380 million on the same month in 2001.

June also saw the daily rate almost triple over a two-year period. Britons sent 45 million text messages each day compared to a daily rate of just over 32 million in June last year.

This takes the UK text messaging annual total so far to eight billion against a 12-month MDA forecast of 16 billion for 2002 which allows for summer slowdown and seasonal holidays.

Big Brother interactive voting increased by 52 per cent to 11.03 million.

The service allows any voicemail 901 user to have professionally recorded greetings from impressionists who assume the voices of celebrities such as Big Brother Darth Vader Ali G or characters from The Simpsons and ask callers to leave a message.

There are now more advanced and secure algorithms but many operators are choosing not to upgrade their current algorithms either out of ignorance or as a misguided cost-saving measure.

Cloning of GSM handsets is rare but it is getting easier and easier to carry out says Daniel Winterbottom author of the report: Minimising the Fraud Risk in Next Generation Networks.

Operators which continue to use compromised algorithms will find that incidents of cloning on their network and the related losses will rise significantly he says.

There is now a technique that can crack a Sim card within minutes of access to it.

The power consumption of the Sim card is monitored while certain instructions are run through the circuit allowing the data to be analysed and the Sim card cloned.

Significant danger is represented by the cloning of handsets. The potential losses will increase massively as m-commerce applications become more commonplace.

Users will be able to transfer money out of their bank accounts and make payments for goods and services through their handset. Without careful planning operators will find that their customers become the victims of huge losses and the liability for the losses will rest squarely on the telcos shoulders says Winterbottom.

Traditional types of fraud still exist and the majority of operators have shown themselves to be ineffectual in curbing them.

The development of next-generation networks offers huge potential for revenue generation but the amount of risk operators will expose themselves to will also increase dramatically Winterbottom adds (see Sharp End P46).

The report by Continental Research found consumers were less likely to mention O2 and T-Mobile than BTCellnet and One 2 One when asked to name a network operator.

Sixty per cent of T-Mobile users named picked One 2 One when asked to recall the name of an operator. There was worse news for O2 as 78 per cent of its users picked BTCellnet.

Alarmingly for O2 the study found that only 39 per cent of its users identified it when asked to name any one network. This compares to 95 per cent of Orange customers and 93 per cent of Vodafone users who knew the name of their network.

The results showed that Orange is the best known brand. It is followed by Vodafone which has over 10 per cent less recognition.

Carphone Warehouse has been involved in distribution since it took over Tandy and has traded through its MobileXpress division for the past three years.

But the distribution arm has always operated at a very low-key level and kept itself at a distance from the retail side of operations.

We are not changing our retail strategy at all and we are not gearing up to try and attract new sectors of the market said a Carphone Warehouse spokesperson.

We are trying to attract more customers but these will be of a similar profile to the ones we have at the moment – the small dealers who are unable to get a couple of handsets here and there.

We will still be selling end-of- line or reconditioned stock; stock that is easy for us to pass on. Again there is no change of strategy.

This is according to the High Street retailers new handset grading system which reviews phones on reliability and customer satisfaction based on the number of phones exchanged and serviced by the company.

The 9210 scored four overall. Other phones that did poorly were Motorolas V70 which scored two in the customer satisfaction criterion.

Worst overall brand was the combined Sony Ericsson which received a joint total of six for its T68i handset while equivalent scores were awarded to the Sony J70 and Z7.

The Ericsson T66 fared only slightly better with a combined score of seven.

The service canvasses feedback on what users think about the reliability of kit.

The grading system appears in all its 470 stores and is also available in the August edition of its Buyers Guide. Phones are given marks out of five for the two criteria.

Satisfaction is based on the numbers of any one handset exchanged for a similar model due to unhappiness with the look feel or functionality.

Reliability is based on the number of faulty phones returned to the groups stores.

Said a CPW spokesperson:

We have always given advice for network choice and tariffs. But there wasnt quantifiable advice for handsets.

We have had a number of customers and staff saying that it is a helpful tool.

The new grading criteria will be applied to any handset that has been on the market for six weeks.

The top seven handsets rated by the system are the Nokia 3330 (9) Nokia 5210 (8) Nokia 6510 (8) Nokia 6310i (8) Samsung N620 (8) Samsung N620 (8) and Samsung T100 (8).

The bottom five were the Nokia 9210 Motorola V70 Sony Ericsson T68i Sony J70 and Sony Z7.