Staff Reporter

All Sony Ericsson account directors now report directly to UK managing director Philip Rambech who used to run Ericssons Asia region.

Im sad to be going its the end of an era Nash told Mobile News. Ive been asked to stay on to (Cont P2) Christmas to help with the transition. Im still looking within the Sony Ericsson global organisation for opportunities.

Globally there has been a massive streamlining. The Ericsson UK head count is down from 60 to 25. The business model in all markets doesnt have a role for a sales director any more. All my colleagues in other markets are going through the same thing.

The account management teams will still be looking after the channels and networks as well as distribution and retail. But they will be reporting directly to the MD. I always knew my role could be at risk.

Administrator Trevor OSullivan told Mobile News:

Were still training as normal. All our customers are still with us. There has been a lot of interest in the company and a lot of potential purchasers have been doing Due Diligence. Were pressing them for formal written offers by next week.

Oras board of directors called in the administrators when it became clear the companys profits were not enough to cover its debt which is put at around 15 million (Mobile News November 26).

This means that all global websites that offer free text messages will no longer be able to send to Orange phones.

One user said:

This is like Royal Mail not accepting letters posted from abroad.

An Orange spokesperson said:

Orange can confirm that it intends to begin charging foreign networks for sending bulk messages to Orange customers in the UK. Orange has decided to take this step to protect its own customers from spamming through overseas carriers.

This will also enable Orange to manage its network traffic better and ensure it gains revenue for the service it provides by carrying these messages. We intend to reach a standard agreement for this service as formulated by the GSM Association.

Commercial terms will be agreed bilaterally.

Orange has also withdrawn its support from internet SMS (Cont P2) broadcaster Locust Cellular Services which was given a special tariff allowing unlimited messages to be sent from the Locust website

If you add the killing of Locust to the removal of free 0800 data calls and the pricing of HSCSD beyond the reach of personal users it appears that Orange no longer wants to encourage mobile enthusiasts to be on its network said Mobile News internet columnist Matthew Haigh.

Dealer Jon Morris who writes the Mobile News Sharp End column said:

Locust was good because it wasnt swamped by millions of users who abused the service. This makes it even stranger that Orange would want to force it out of business. Locust had a lot of techie users. They are considered a tiny part of the mainstream market nowadays. But they are quite influential people in the world of IT.

If they leave Orange they will get other people to do so too. They are often the people who have influence within companies for buying decisions.

They will make it their personal mission to punish Orange (see Web Watch and Sharp End inside).

The dispute is over connections made through two Rocom dealers Newcastle-based ITS and Wales-based Select Communications both of which have now gone into liquidation.

In the case of ITS its directors uncovered connection irregularities involving alleged collusion between ITS and Orange employees. Once it got wind of the problem Rocom suspended ITSs account. ITS subsequently went into receivership. The matter is now being investigated by Police.

Similar irregularities occurred at Select Communications. Rocom became suspicious about an order to connect a large number of handsets and refused to sanction the deal. Select too subsequently stopped trading. Rocom says Orange sales staff also had a hand in this deal. Orange has since suspended two sales managers (Mobile News November 12) but Rocom officially declined to implicate them.

Rocom chairman Bob Old told Mobile News that Rocom would fight Orange over the 1 million clawback claim.

We are resisting this claim because both accounts involved Orange senior management who approved the deals. Because Oranges people approved the business clawback should not apply. I have not formally been advised that the two managers under suspension at Orange have had any involvement with the two accounts.

However Mobile News has been told an Orange national sales manager was involved with both ITS and Select Communications accounts. He is also believed to have authorised Orange marketing funds to be paid to ITS and Select. This could explain Oranges statement two weeks ago about two staff suspensions for misappropriation of funds.

An Orange spokesperson merely stated:

There are issues that need to be resolved with Rocom.

All 13 stores in Berkshire Hampshire Somerset and Wiltshire were closed on January 2.

Callers to the shops are met with an answer phone message that says:

Mobile Communications has ceased trading to undergo a full company review and hopes to reopen shortly.

Its understood the company may go into receivership or re-open the stores under a new trading name. City-based insolvency practitioners Antony Batty & Co confirmed it had been in contact with Premier Mobile about possible receivership. Partner Antony Batty told Mobile News:

We have been in talks but we have not been officially appointed yet.

The company does have other options. It could reopen the stores under another holding company.

Premier boss Alan OBrien purchased the 13 outlets from dealer Mike Buckland last year. At the time of the sale the stores turned over around 4.5 million a year and did 1500 to 2000 connections a month.

Buckland went on to launch his new venture Gr8 which (Cont P2) involves selling pre-paid scratch cards to enable people to customise Nokia phones with personalised ringtones logos and picture messages (Mobile News February 5).

Buckland says he has heard nothing from OBrien.

They wont confide in me. We had a legal dispute with Premier last year over payment of the stores. I have only heard that the shops have closed he said.

OBrien was unavailable for comment.

Ora Telecom directors and investors called in receivers RSM Robson Rhodes last week after it became apparent that the companys debt and borrowing were spiralling out of control in the face of a shrinking handset market.

Some industry insiders have put the level of Oras shortfall in many millions with any profits having to be ploughed into debt servicing.

Ora sales and marketing director Bob Walker said:

The board invited RSM Robson Rhodes to safeguard the ongoing trading position. This was a difficult decision to take but necessary under the current trading and market conditions. Our current situation makes the company an attractive proposition for the right partner or investor.

Robson Rhodes partner Simon Bower told Mobile News:

Our role is to keep the (Cont P8) business trading with a view to selling it as a going concern. Weve spoken to all of Oras major customers such as Orange BT The Carphone Warehouse and Vodafone. They have all been very supportive and are keen to see the business survive said Bower.

Weve also seen interest from a number of parties interested in buying the business. Im hoping for a positive outcome in the near future. There has been response from all parties. Suppliers still want to continue supplying the business. Were in the busiest period of the year but it isnt as busy as last year.

Bower said the main factors behind Oras failure were a downturn in the marketplace and a high level of debt. Ora directors considered a number of options to refinance the business but ran out of time.

Whether or not current creditors get any outstanding invoices paid depends on how the business is managed. But it is unlikely that a trade buyer will want to inherit the companys debt.

Bowers added: Hopefully we can give the business some protection from creditors so it can be sold going forward. All Ora staff are still there.

An industry insider who knows the accessories market said that Ora could no longer trade on its reputation of being a respected supplier of quality product.

These days anyone can go on the internet and order 35 containers of batteries for 10000. The problem is these are not the quality Panasonic product supplied to the OEM market. Ora founded its reputation on quality but had to move down the lower-quality sector and sourced lower-quality product from Taiwan in order to stay competitive. It started boxing inferior product under its brand name.

This was clearly a mistake. There is a niche market for OEM-quality accessories. But the manufacturers have realised that and are doing it all themselves.

Oras founder and non-executive director Malcolm Hanson admitted there had been some poor management decisions about product.

Add that to the low cost of products which allows anyone to go to the Far East and bring them back to a much more price-oriented market and you suddenly get a problem Hanson told Mobile News.

Hanson sold his share of Ora three years ago for 10 million to a management buyout team led by Tim Helstrip and John Whittle but had to leave a substantial portion of that money invested in Ora. The new team blundered and within a year Hanson was brought back as chairman to hire new management and save the business.

Ex-Nortel director Ken Edmonds was appointed managing director but left a year later to be replaced by Ken Jacobsen who announced earlier this month he was leaving (Mobile News November 12).

Former Kondor managing director Mickey Priman said:

It is sad news. Ora is paying significant amounts of interest on debts accrued from a couple of years ago as reported in Mobile News. Ora MD Ken Jacobsen tried his best to turn things around and the company was making money. Ora had strengthened its position on the high street. It gained some very good accounts with BTCellnet and Orange which is an asset to the company. But huge debt payments ate up the profit and the company suffered a loss.

Ora has high overheads. The warehouse is under-utilised and the call centre operation is expensive to run. Had there been a merger with Kondor one of the warehouses would have had to go and there would have been redundancies Priman explained.

I am surprised they didnt go ahead with the Kondor merger last year. Kondor was a profitable business. Ora shareholders found it hard to accept that they would have a smaller share in the new company because of Oras debt problems. But the joint company would not have been in debt.

Oras situation is a reflection of the industry. In accessories you have to work harder to make the same profits or less than you were making last year. Retail prices have gone down because of cheaper Far East imports. Everyone is selling accessories cheaper but costs remain high. It is very easy to start losing money Priman added.

He retains the position of FCS honorary president. This leaves chief executive Jacqui Brookes with the top role in the FCS.

It needs the money to develop a new service platform because Swiss GSM operator Swisscom which provided the Mint Sim cards was no longer going to support the service.

Mint has about 100000 active subscribers and the service continues as normal for the time being. No customers have been cut off yet.

Icelandic mobile phone operator Hallo has a 50 per cent share in Mint. Hallo chief technology officer Larus Jonsson told Mobile News:

Mint has ceased trading. The decision was taken by Mint directors after the company was unsuccessful in raising funds for projects. The directors are looking at all the options. The company will go into receivership in the next few weeks unless finance can be raised.

Running costs were higher than profits. Mint experienced technical problems with credit top-up. Customers couldnt refresh their call credit without calling the call centre. A big problem has been the failure to provide post-paid services (Cont P2) to corporate customers. Both problems would have been addressed with the new service platform but Mint has been unable to raise funds in time.

Profitability per customer was not as high as calculated. The corporate market was an essential element to the business. Corporate customers want post-pay services added Jonsson.

Elite Mobile Accessories which distributes Mint Sim cards and vouchers said the failure of Mint would not hit the company badly.

Elite managing director Ajay Gokani told Mobile News:

We still have some stock here. But Mint isnt a big seller. None of our customers have complained that the service is not working. We are not able to get any new stock at this time. If it does go into receivership it wont be a big loss to our business.

Two Orange employees have been suspended pending investigation of allegations of misappropriation of company funds.

Orange takes these allegations very seriously and is conducting a full investigation said a statement from the company.

Industry sources hint that information from the Orange dealer database may have been sold for cash to third parties. Some Orange dealers have complained that customers are getting unsolicited calls from third-party companies offering them upgrade phones within a few days of their contracts expiring.

Vic Hockley a partner in East London-based Cellular Connect says his customers have been affected.

Some of our customers have been approached by third-party companies offering them upgrades. We try to provide a good service to our customers and part of that involves keeping an eye on the amount of time they have had their phone said Hockley.

In recent months customers have been getting calls within a few days of their 12-month contract expiry date. It seems like these companies have obtained details from Oranges customer base.

We will continue to produce a wide range of phones. The announcement means our production is being transferred to the Czech Republic. In the meantime we are extending the mobile phone research and development facility at the Thatcham site spokesperson Brendon Gore told Mobile News.

Panasonic continues to manufacture mobile phones globally in China the Philippines and (Cont P2) Japan. A drop in demand for phones in Europe increased competition and pressure from exchange rates means it is cheaper to produce phones outside the UK said Gore.

Panasonics head of business systems Bob Tate added:

The desire to be successful in mobile phones is maintained. We had to react to the difficult market by transferring production out of the UK. As the market declines the cost of manufacture is critical. We need a low cost base for manufacturing.

Tate says Panasonics UK performance is starting to show improvements.

Operators have moved towards contract business. That suits us as a company and the products we want to bring in. Sales are starting to improve. New products have been launched. We are making steps forward.