Staff Reporter

The admission comes in the details of Vodafone Groups year-end results which described the performance of the dealer market as mixed with a strong first half balanced by weaker growth in the second half as the growth of pre-paid services and new retailers affected the traditional distribution channels.

But connections from Vodafones own shops doubled the rate of the previous year.

Vodafone Group chief executive Chris Gent also debunked the myth that pre-pay customers are not as valuable as users on contracts.

Speaking at a press conference last week at the Savoy Hotel to announce the Groups latest financial results Gent said that Pay As You Talk customers were (Cont P14) proving more valuable than those who paid a years up-front line rental for all-in-one packages.

This was because purchasers of all-in-one boxes were certain to churn to another network once the year was up.

Churn on Pay As You Talk of 20.1 per cent was running lower than contract churn of 27.8 per cent. The latter had risen slightly as some contract customers reverted to pre-pay. Vodafone was earning average net revenue of 159 a year from pre-pay customers up 10.4 per cent on six months ago.

The profits result was below forecasts and the City marked ETs shares down.Earnings were also hit by the company having to write off 200000 after a leading manufacturer (believed to be (Cont P2) Nokia) cut the price of its most popular handset. Apparently European Telecom had ordered a vast quantity of this model phone for an order which never materialised and left it without price protection on the stock.

Another 300000 disappeared from the bottom line after problems with the French subsidiary and its internal control difficulties and discrepancies.

Start-up losses with the Global Telematics joint venture (Racal is the other partner) were greater than expected. Although Global Telematicss fortunes have been given a lift by the winning of a 1 million contract to supply Parcel Force with vehicle tracking systems.

Our core business is sound and growing with sales increases now being achieved in the stable and profitable markets of Western Europe which including the UK now account for over 90 per cent of our turnover said European Telecom chairman and chief executive Warren Hardy

The company will be run by John Gardiner and is currently in discussions with the networks about the technology. Trials of the system are currently taking place.

The idea is that dealers and retailers will be able to handle pre-pay voucher transactions through a PDQ-type terminal rather than having to stock the vouchers.

Over the last two years Banner has built up a strong management team and has given me the opportunity to look at the strategy of the group Gardiner said.

As the distribution of pre-pay vouchers has become a major headache I looked first at the problems and then the opportunities it offered. I felt it to be a major opportunity to the shareholders of Banner Telecom should that opportunity turn into a successful business.

Mike Sharpe and myself did not want the team at Banner to lose their focus on what they do very well which is the physical distribution of comms products (full story next issue).

The crisis has been sparked by Cellnet re-considering its position on continuing its 200000 contribution after September. BT is apparently demanding that Cellnet justify the costs and says its own fraud investigators can do the same job.

The other networks all support the CPI but are unlikely to continue on their own. Cellnet and Vodafone contribute the lions share of the costs.

The Crime Prevention Inspectorate is currently funded until September 1999. But it requires financial commitments by all four networks to be in place by the end of June if the Scheme is to continue beyond that date.

The Scheme is very close to folding said a source close to the FCS.

If even one network pulls out there will be a massive dilution of its standing and efficacy. And anything that breakaway network was to go on to do on its own would not have a fraction of the weight behind it that the FCS Crime Prevention Inspectorate commands.

Cellnet spokesman William Ostrom said:

Speaking for Cellnet alone we were reluctant to commit significant additional resources to the FCS without having a stronger understanding about how the FCS would structure itself and deliver against the objectives that would inevitably accompany increased resources. Our only current involvement is in the FCS Crime Prevention initiative confirmed Ostrom.

Our commitment to crime prevention continues. Indeed we are committing more to it than ever before.

We will continue to give money to the Crime Prevention Inspectorate so long as it flexible and continues to be relevant when it comes to tackling the types of crime and fraud with which we see confronting all of us in the industry; networks SPs and dealers.

FCS manager James Malcolm said: As far as we are concerned the Crime Prevention Inspectorate is doing an excellent job and will continue to do so with valuable by-products in addition to the headline grabbing news.

But if the Scheme was to fold for whatever reason it would be disastrous for the industry.

However this report has been funded and published by a Swindon-based company called TecnoAO which is marketing for 29 an oscillator which emits a magnetic signal that boosts the bodys ability to overcome the harmful effects of non-thermal radiation.

TecnoAO chairman Anthony Fraser told Mobile News his company had funded a paper by Dr Gerard Hyland (senior lecturer in the department of Physics at the University of Warwick).

Hyland argues that the current safety guidelines on mobile phones are fundamentally flawed and in need of a complete rethink. He says it is wrong to only consider the heating effect of microwave radiation on body tissue and that exposure to magnetic fields can disrupt ions contained in human body proteins.

TecnoAO claims cellular phones are a major source of chronic electromagnetic stress for their users and that Chronic stress related to electromagnetic pollution manifests itself depending on the individual through a variety of ailments headaches memory loss insomnia irritability back pain decreases in concentration and alertness even including compromising immunological and hormonal states.

TecnoAO says its magnetic oscillator works because its magnetic oscillation acts as a tuning fork for the brain and maintains normal ion-protein links.

TecnoAO has also funded a Mori poll which said almost half of all mobile phone users are concerned about health risks from electromagnetic radiation.

The poll which was conducted among 2012 adults last month found 62 per cent of users questioned expressed interest in obtaining a product which might reduce potential health risks.

The Federation of the Electronics Industry (FEI) continues to maintain that the consensus among scientists is that there are no established health effects from using a mobile phone.

We continue to support quality peer-reviewed research openly shared with the public. It is important that anyone concerned about mobile phone safety considers the totality of the science rather than drawing conclusions from individual studies said the FEI.

Phones sold in the UK operate well below exposure guidelines which are set by the National Radiological Protection Board. The safety of mobile phone users continues to be supported by scientific evidence. Even though scientific consensus has not established cause for concern over the use of mobile phones on health grounds the industry willingly accepts its responsible to continue to add to the substantial body of knowledge. We are doing exactly this.

The five includes a larger licence reserved for a new entrant into the market which will be allowed to roam onto Cellnet Vodafone Orange and One 2 One networks until its own is established. Third generation mobile phones will allow users to surf the Internet download music and pictures and hold wireless video conferences.

Orange and Ericsson have already started trials into the new technology.

The ability to roam onto GSM networks is critical for the success of any new UMTS operator said Ted Beddoes chief executive of mobile radio operator Dolphin Telecom.

Beddoes who was instrumental in setting up Vodafones network in 1985 explained:

With roaming any candidate who does not have an existing GSM or DCS 1800 network will have the opportunity to construct a viable business case for UMTS since they will be able to compete effectively against the incumbents.

The choice of five as the number of UMTS licences is also important for future competition. With four licences it is possible they would be secured by the four existing cellular networks.

With five there will be at least one new entrant. This will encourage new entrants to participate in the auction and stimulate competition to the benefit of the user.

Speaking exclusively to Mobile News Edmonds said:

The four networks say they are interested in producing clear information for the consumer. The evidence suggests that is not the case. Its incredibly difficult for the consumer to work out what the right tariff is for them. And I do not believe that the mobile companies try to help the consumer (cont P2).

The issue is understanding that the consumer wants clarity and simplicity. The consumer doesnt want to be mislead. Thats good business practice rather than regulation. It is fundamental to having success in running a business. The companies that will eventually come out on top are those which give the customer what he wants which is all of the above.

I dont want to be seen as knocking the quality of service of the mobile phone companies. They are offering freedom and value in a way that few of us could have anticipated even a few years ago. But they are not going far enough.

Given the very significant profits that these companies have made and are continuing to make I do think that there is a margin there that they have to revisit and address.

Its the margin of the unsatisfied customer the margin to do with clear information about pricing and coverage and its to do with clear information about the contracts that the customer is entering into.

Cole will be the face of Low Costs marketing and TV campaigns. Cole recently launched the Manchester Low Cost shop.

He reverts to his old role as a non-executive director of European Telecom. Meanwhile ETs chairman Warren Hardy re-assumes the role of CEO he relinquished to Bruegger late last year.

Dawe joined 20:20 last August from UniqueAir where he was distribution manager. At Fone Bitz he will be re-united with his old boss Rob Lees an ex-MD of UniqueAir.

Theres no animosity. I decided about a month ago that it was too good an opportunity to pass up Dawe told Mobile News.

There will soon be 25 million subscribers out there who will all want handsfree kits and other accessories. The plan is to expand the operation selling out of small specialist sites such as train stations and motorway service areas. We may also run a trade operation and go into pre-pay but certainly not contract phones.