If Orange s channel strategy appears uncertain it is not for want of navel-gazing. US consultancy firm Bain & Company which applied its sliderule to Orange s Belgian subsidiary Mobistar when current UK chief Bernard Ghillebaert was in charge has been engaged with its UK business since the middle of last year.
Bain s stated objective is to convert strategy and action into economic performance . Orange s strategy across all aspects of its UK business should then be absolutely clear. But its lines of communication with the indirect channel appear to have frayed since the departure in late 2005 of sales director Stuart Henry whose shoes remain unfilled and the loss of head of sales for independent retail Chris Hough in July this year.
Successor
A successor to Henry has been in position on three separate occasions only for a deal to collapse at the 11th hour on each. Orange vice-president of sales Mike Newnham says: I ve been very unlucky with recruitment. I have spent a huge amount of time looking for a replacement for the role of sales director. I am not giving up. And I m optimistic we ll have an answer pretty soon.
Newnham rejects the idea that Orange s identity within the dealer channel has suffered because of its personnel changes. Hough s position has been filled by former Wanadoo head of sales Steve Heald whose experience of broadband sales will be brought to bear on the channel after Christmas. Louise Turley Orange s recently departed channel marketing manager has been replaced by Sarah Dunne from T-Mobile. Long-standing dealer managers Andy White Andy Wilton Steve Allen and Vik Patel remain in place.
There hasn t been a wholesale shakeout claims Newnham. I recognise we ve lost Stuart and that he s high-profile but the rest of the team is well-established and Steve has come in with good broadband experience. He brings something more to our team and to our channel partners. The plan is to make broadband available on a standalone basis and in bundled propositions in more indirect channels next year.
Consolidation
Orange showed its hand early this year. Having carried out an internal audit through the second half of 2005 to identify low-quality connectors it terminated dealer accounts on a regular basis through 2006. There is at least a part of the distance-selling market that has brought bad quality business and a bad customer experience to Orange Newnham notes. Mis-selling and poor customer service are frankly unacceptable.
The introduction of key performance indicators for its distribution and direct dealer partners as well as the wider network trend to take more business direct have been taken as signs that Orange will consolidate its third-party relationships next year.
Some distribution sources worry that Orange s present commission structure within its own retail outlets linked to its own mystery shopping scores and its stores overall performances month-to-month is a way of reining in commissions for direct sales before it shuts down third-party retail altogether and drives footfall to its own stores.
Newnham with a nod to the network s heritage rubbishes the suggestion that Orange will ape Vodafone and O2 and turn its back on independent consumer retail.
There will be a continued focus on quality next year but there will not be a wholesale reduction of the channel says Newnham. Orange has grown up with these people and a lot of these people bring great business. Why would I turn that away? As an overall principle I m trying to drive one of consistency rather than one that goes through peaks and troughs as has happened this year.
Support
Consistency will come as Mobile News has reported in the form of ongoing revenue (see right) and quarterly price books. Newnham again won t be specific. But he says Orange is working closer than ever before with its partners.
All distributors have signed up to a data protection agreement to enable an easier share of customer information and Orange is running more stringent checks on new dealer account applications to protect both itself and its partners from re-signing bad connectors that have set up again under new names.
Newnham also dismisses speculation about its rules of engagement that Orange is to ring-fence its own stores so that third-party retailers near Orange outlets will be prevented from selling its products and services. There is absolutely no truth in those rumours. I don t know where they came from. I can say now categorically that won t happen he says.
Carphone
Newnham will not be drawn on Orange s ongoing negotiations with Carphone Warehouse over its first quarter contract nor in specific terms about whether Carphone will sell Orange Broadband alongside its own TalkTalk Broadband proposition next year.
However he draws an offhand analogy to the old hat argument that Carphone is now a competitor of the networks. Tesco sells its own-brand cornflakes next to Kellogg s Cornflakes Newnham says. He disagrees with the argument that Tesco does not offer an assisted sale on account of the point of sale activity in its aisles .
Make of that what you will.

Sharing the wealth

Orange has no immediate plans to hike upgrade commission. It prefers a revenue share scheme for its partners as a tool to halt churn.
The problem for Orange is that the scheme slows churn in the long-term but fuels it in the short. Orange s registration system is antiquated according to sources. As it stands it cannot register existing Orange customers on its revenue share scheme when they upgrade their contracts. Dealers have to disconnect and reconnect them to take a share of the revenue.
At the same time Orange has made disconnect rates one of its key performance indicators. To qualify for the scheme in the first place dealers have to keep disconnect numbers down. For dealers it is a delicate calculation to drip-feed their existing base onto the scheme at a rate that does not preclude their qualification for it.
Orange s 16 federation dealers its club of top-performing direct dealers brought across from its old Orange Business Specialist scheme took their first pay-out on the scheme in October. However sources say a cultural shift needs to take place for most dealers to accept ongoing revenue a fundamentally different reward scheme to regular commission payments as good reason not to churn.
In the meantime the question for distributors is how to redistribute the wealth. Orange s solus distributors Midland and Mainline have set up clubs like the Orange federation and will pass down revenue to those that hit targets. Both have a month s grace on the rest of the distribution channel. Others take their first instalments from March. It remains to be seen how they will work the revenue into their commercial packages for dealers because it is a first.

Sony Ericsson looks set to nick top spot from Nokia for the Christmas quarter and possibly usurp it as best selling handset manufacturer for the year.
According to data from research company Gfk by which the industry measures handset sales Sony Ericsson has been the best selling vendor for the past nine weeks.
One manufacturer source said: Sony Ericsson will take the number one spot this Christmas. It will be the first time that Nokia s been toppled for five years. It s been given a real run for its money. Sony Ericsson has had a phenomenal year.
Figures for the week ending November 18 show Sony Ericsson with over 25 per cent of sales. Nokia had just over 20 per cent of sales for the week. Samsung and Motorola were third and fourth respectively.
Nokia slipped back to third place behind Motorola during the week ending November 25. Motorola s surge coincides directly with it slashing prices on its V3 and L6 handsets to under 100 on pre-pay.
Monthly figures for October show Sony Ericsson to be second in the table with 27 per cent of sales for the month just a single percentage point behind Nokia with 28 per cent.
Weekly figures cover 80 per cent of handsets sold in the UK market. It excludes non-specialist retail outlets such as Tesco Woolworths and Argos. It also estimates sales through O2 and Vodafone outlets. Those figures take longer to arrive.
The monthly figures record sales for 98 per cent of the UK market.
Sony Ericsson s success this year is down to a combination of iconic handset designs strong branding and a full product portfolio. Its high-end handsets from early this year such as the K750i and W810i have been made available on pre-pay ahead of Christmas. Even its K800i camera-phone is available on pre-pay priced at 190 and selling well.
The networks have also got behind Sony Ericsson. One retail source said: Sony Ericsson s had a stunning year. It s edged Nokia out. Nokia is selling a lot of volume at the low-end. Nokia is strong for low-end handsets. Sony Ericsson s releasing monster handsets with great functionality. That s good for networks which want users to download content and increase ARPU.
Another added: At the moment Nokia and Motorola are the weakest players.
Sony Ericsson marketing manager Richard Dorman said: It s proving to be a very interesting scrap this quarter between not just ourselves and Nokia but all the top four manufacturers. We ve seen a little slow down in contract sales but not nearly as much in pre-pay sales as we have in previous years.
Nokia director of communications Mark Squires said: We are a victim of a diverse product range. We tend to be in more outlets than other manufacturers. So it doesn t measure the full range of Nokia s activities and sales. The market has moved on and it is difficult for me to comment upon an imperfect measure.

Kes Ingoldsby 18 from Henley and James Diggins 19 from Reading have been charged with his murder. Both have been remanded in custody.
Langford joined Avantimobile from 4U Business where he had set up a new corporate sales department. He had also worked in sales management at Vodafone and was at Orange as an enterprise solutions sales manager.
Avantimobile managing director Tony Lloyd-Weston said: Though he d only been with us for a few weeks he d made a significant impact. Stephen was immensely likeable. He was one of life s nice people and was widely respected throughout the industry. Our thoughts are with Stephen s girlfriend Kim and his two children.
Mobile industry recruitment specialist Graham Sedgley added: I ve known Stephen for about 16 years. I placed him in a couple of roles. He was always extremely polite and a great guy to do business with. I am devastated. It still hasn t sunk in.

Fifty search warrants were issued for business and domestic addresses in the UK with computers and records being seized. Six arrests were made in the London area three in Glasgow three in the Midlands three in Cheshire and the sixteenth in Cardiff. All suspects were held overnight for questioning. At time of going to press none of the suspects had been charged.

HMRC had used extended verification for eight months as a reason not to give the refund. Livewire then invoked the Judicial Review process to force HMRC to make its decision one way or another.
The ploy of invoking Judicial Review worked. But resulted in HMRC decision s to refuse the refund even though there was no VAT fraud in the supply chain. Livewire may now appeal to the VAT Tribunal and may seek a referral to the European Court of Justice.
We appreciate that HMRC are experiencing many problems within our trade sector but we are disappointed with their tactics bearing in mind by their own admission there are no missing traders nor has the Revenue incurred a loss within any of our deals it seems impossible that our input claim could be invalid said Livewire director Richard Gallant.
It appears from their actions as though HMRC were unwilling to defend the Judicial Review we brought and by acting as they did have thrown a spotlight upon their failure to conduct enquiries in the manner they had previously claimed.We hoped that the Judicial Review would give us the opportunity to have a court look at the substantial evidence that HMRC are acting disproportionately and unreasonably by completing an eight month extended verification .
Unfortunately by HMRC giving this negative decision two days prior to our court hearing they have succeeded in denying our case from being heard.We are now faced with more expense by following the VAT Tribunal route. Weare hoping to get a hearing early in 2007.
Ironically Livewire s own web site carries a link to HMRC s website. The company receives all goods purchased from outside the EEC into a central hub in Dusseldorf. It will not open a new account without checking out a potential customer s solicitors bank and obtaining trade references.
Don Mavin of VAT consultants Vantis who advised Livewire said: The client decided to go for judicial review after delays by Customs and no response to questions of the progress of their enquiries. While the decision is not what the client wanted it nevertheless calls a halt to the endless enquiries being undertaken by Customs in their case and the client now knows where they stand .

Carphone Warehouse CFO Roger Taylor said last week that Carphone had retained the right to sell Vodafone upgrades. Taylor suggested that upgrades account for up to 50 per cent of the lost Vodafone business.
But Vodafone claimed upgrades through Carphone amounted to closer 15 per cent of the business the pair have done in the past.
A Vodafone spokesperson said: Neither party came back to the table cap in hand. It s not a change in policy. The number of upgrades is not significant amounting to some 15-20 per cent of the business Carphone does with Vodafone not the 40-50 per cent that s been talked about. The revenue implications are even smaller because of the commission structure.
She added: We re only a couple of weeks into the 4U deal and we re delighted with the sales and the relationship in general. We are totally committed to it as far as the retail consumer is concerned.

O2 said it wants to form an exclusive club of the best wireless data companies in the UK and help members increase data usage among mobile users.
It said that the new programme aims to provide leadership and recognise key partners with outstanding data expertise. Like its O2 Advance scheme the data programme sets out performance criteria for dealers to gain membership to the club and rewards them with benefits to grow their businesses.
O2 will offer dealers in its data club official O2 certification which recognises them as preferred data resellers. It also offers additional marketing support on lead generation promotional activities and incentives. O2 said it will guarantee commission payments for dealers on data connections.
O2 is also looking to offer additional support to partners with recruitment access to kit and information sharing.
Details were still being finalised as Mobile News went to press.

Webber was responsible for putting together 3 s long-awaited business proposition ear-marked for launch on February 1.
Nick Armitage who reported to head of distributor sales Peter Butler has also left.
A total of 130 staff have been made redundant from 3 s UK business. More staff will be re-deployed in different roles.
The Link operations director Ian Parpworth is set to join 3 in the New Year to oversee the store roll out. 3 has also recruited Kevin Russell from 3 in Australia as deputy chief executive. Russell is expected to replace Fuller who is likely to take retirement in the Summer.
Canning Fok managing director of parent company Hutchison Whampoa is understood to have set up home in the UK to oversee the operation going forward.

Jacqui Brookes the CEO of the Federation of Communication Services (FCS) has been awarded an OBE for services to the industry in the Queens New Year Honours.

FCS chairman Ted Beddoes said: Jacquis award is richly deserved and makes a fantastic end to the 25th anniversary year of the FCS. It is great news that through her diligent work the FCS and its Members are being recognised in this way – the UK continues to present a dynamic competitive environment with great opportunities for the new and developing businesses the FCS represents.

The award recognises Brookes work in representing small and medium enterprises with the Government and the telecoms regulator OFCOM.

Brookes has been involved in the radio fixed and mobile telecommunications industry for more than 15 years. Membership of the FCS has increased more than threefold since Brookes took the role of CEO in 2002.

Brookes was originally appointed in 1990 to manage FCS trade association projects. Her experience covers representation to Government and regulators on radio spectrum competition markets and consumer issues developing self regulatory schemes including industry codes of practice staging conferences and seminars and building FCS information services.

The Prada phone follows other fashion-led LG handset which have sold more than six million outside South Korea.
LG Mobile marketing manager John Bernard said: It will look like no other handset. In the same way that the Chocolate was unique in its design because of its heat sensitive keypad the Prada phone will also be unique in its design.
Bernard said that no exclusive deals had yet been struck with either retailers or networks but that one of each should get a limited
exclusivity period on the device.
It just depends on who is hungriest he said.