Staff Reporter

BTCellnet Security BT UK Investigations and the National Crime Squad mounted a series of operations in the Leeds and Loughborough areas against suspected manufacturers and suppliers of re-chipped BTCellnet pre-pay phones.

Ten warrants were served and premises searched. Nine arrests were made. Up to 30 BT and BTCellnet security personnel and twice as many police officers were involved (from West Yorkshire and Leicester police forces along with neighbouring police forces) as well as representatives from the FCS Crime Prevention Scheme and Trading Standards officials.

Items recovered showed that the perpetrators were involved in other counterfeit fraud. A sizeable sum of cash re-chipped handsets and other counterfeit goods including clothing digital set top boxes CDs and CD ROMs were seized.

Before this operation had taken place 19 people had already been arrested in half a dozen operations around the country. Whilst BTCellnet believes that the key perpetrators of the pre-pay re-chipping fraud have now been caught it is carrying out further security operations over the coming weeks.

These criminal offences (including simple possession of a re-chipped handset) carry a maximum sentence of five years imprisonment under section 42 of the Telecoms Act. With the evidence gathered we are confident that prosecutions will be successful said a BTCellnet spokesperson.

The business is as yet without a trading or brand name and is still to launch its product range. But Mobile News understands the company will concentrate on new value added services with the emphasis on e-commerce. It will trade in the UK Europe and the Middle East.

Schweidler told Mobile News:

Initially well be looking at pre and post-pay calling cards and at the pre-pay mobile card market. For the time being at least well be working closely with the mobile operators. The first types of products will probably be in support of voucherless pre-pay. Were looking at new ways of doing electronic top-ups.

This is the first time Schweidler 41 has set up a company from scratch. Though he does have experience in working for start-up companies like Plessey Telnet.

Warren (Hardy) had been working on the idea behind the company for a while. He was looking for somebody to take the idea he had and make it successful. Its an ideal match. Some of the ideas weve had and some of the things we will be doing are essentially very simple. One of the richest men in the UK made his fortune from cardboard cartons. One of our key ideas is not much more complex than that he revealed.

Pre-pay is going crazy and not just here in the UK. There are opportunities there for the taking in almost every European company though some are more developed than others. Those countries which have made a determined effort to increase penetration clearly see that pre-pay is the route to follow.

Ex RSL Com Financial Director Ian Bright is understood to have joined Schweidler and Hardy in the new venture

Their departure on November 5 came just weeks after the company was sold to BTCellnet for 42 million.

Emmanuel and Whyte founded DX in 1991 and transformed it into one of the most successful mobile phone retailers in the UK.

The pair are now going to concentrate their energies into their new holding company which includes European retail interests financial services hire and Westwood Communications the Clydebank-based mobile phone repair and servicing centre. Westwood is now one of the largest businesses of its type in Europe.

The company recently announced the creation of 100 new jobs.

Said Emmanuel:

It is strange for John and I to move on from something we have been so involved in for eight years. However we both believe DX Communications is in very good hands with BTCellnet.

For the last 10 days customers in selected Boots outlets were invited to select and pay for one phone from a choice of 12 pre-paid packages in order to qualify for another pre-paid phone package up to the same value completely free of all charges.

But most branches ran out of stock within hours of the offer taking effect. A Boots spokesperson admitted that stocks did not last for the whole of the 10-day period of the offer.

We have made clear all along that this promotion is being run on a first come first served basis. The promotion is going very well. It is possible that some stores will run out of stock before the 15th November. But I do know that we have been successful in sourcing more stock which has been supplied to some 20 of our larger stores.

Pre-paid packages have been available at selected Boots stores for some time

We quite often run buy-one-get-one-free offers across the whole of our product range. So we (Cont P2) are not singling out mobile phones. Last year we saw just how popular pre-paid mobile phones particularly were as presents. We have just seized a commercial opportunity as it presented itself. Naturally we have made the most of the negotiating power we have as a company

The new company has 66000 customers around 90 per cent of them already connected to Vodafone

The business is based in East Kilbride and operates 25 retail stores in Scotland Northern Ireland and North-East of England.

We are delighted to have concluded this deal with ScottishPower and Martin Dawes Telecommunications with whom we have had a successful relationship for many years. We plan to integrate the business into our UK distribution structure said Vodafone UK chief executive Peter Bamford.

In another development VodafoneAirtouch last week became a 100 billion company when its shares touched 3.22. To put this in perspective Vodafone was valued at 130 million when the 20 per cent owned by Racal was floated in 1988. It was worth 3.3 billion in 1991 when it achieved full independence from Racal.

Forms for companies wishing to enter will appear in the next issue of Mobile News (November 29).

Because of reduced margins we have changed from a dealer manager basis to internal telesales operation which has seen no decline in figures said TCL managing director John McLuskie.

Over the last few months BTCellnet has been battling the problem of Diga handsets which have been modified with a rogue chip to reset call credits when the phone is turned on and off.

BTCellnet is the only network suffering from this fraud because it is the only pre-pay service where call credit is calculated by the phones software. Vodafone One 2 One and Orange all maintain security at network level.

The network claimed that the only affected phones were the Philips Diga Easylife models and had guaranteed these Digas were being withdrawn from sale in order to prevent the problem escalating.

However it now appears that the Philips C12 models are also affected by the scam. Modified C12s can be purchased for as little as 100.

BTCellnet spokesman Dave Massey said:

We do know that the C12 is affected by the doctoring of the phone. But I must point out that this does not in any way affect bonafide customers. We are aware of what is being done to the phones and we do now have the situation under control.

So how is the situation under control when the handsets are readily available to buy on the shelves and people are openly using doctored phones to make and receive calls?

We have put into place a monitoring process that highlights phone numbers where there is a difference between usage and credit entered onto the account said Massey.

Once we have this information we can either bar the line and effectively stop the user making and receiving calls.

Or we can leave the line open to try and investigate where the fraud is taking place and then work with the police to make arrests. See Full Story

The partnership will involve Marks & Spencer Orange and Motorola and it will be the first time that Marks & Spencer has sold co-branded products in-store. Initially Marks & Spencer will distribute the new product in 35 of its leading city and out-of town stores across the country. Marks & Spencer will offer the Orange Motorola cd930e and the Orange Motorola m3688e both of which will be specifically tailored for Marks & Spencer.

The handsets will have a one-digit speed dial feature to connect customers directly into a wide range of M&S direct services. These include M&S Financial Services and M&S Direct which includes home shopping and clothing services.

Bob Fuller group director of UK Operations at Orange said Orange takes a more strategic and considered approach to its distribution strategy. Todays announcement further augments our High Street presence introducing as it does a new quality retail partner. Orange is focused on nurturing a market where we continue to attract high-usage valuable and loyal customers to our growing subscriber base and Marks & Spencer will assist us in this considerably.

Qualifying customers will be able to make free calls to one standard UK land line number until the middle of next year.

The promotion called Best Friend will be promoted by a multi-million-pound ad campaign on TV.

Advertising starts this Saturday (November 6) until Christmas Eve.

Customers typically call one number more than any other. So Best Friend provides them with a promotion that delivers real benefits said BTCellnet marketing director Kent Thexton.