Staff Reporter

Dealers have again complained that Orange is attempting to bypass the dealer channel – by offering customers a better deal through its own upgrade team. Orange says that the letter was only sent to One 2 One Precept OVP customers in fulfilment of Talkplan terms and conditions.

An Orange spokesperson said

Orange recently communicated with customers on the OVP Precept plan to outline their upgrade options. Customers who joined Orange on this plan were entitled to receive a free upgrade after two years. Orange is simply fulfilling that original promise. This upgrade affects a small proportion of Orange customers.

We are not aware of any customer complaints concerning the way in which this offer has been communicated to them Orange values its relationship with its dealers.

We continue to work with them to develop and implement appropriate methods and schemes for the future management of our customers.

Meanwhile a Welsh dealer has accused Orange of poaching his customers.

Mike Lynch of Premier Line Communications (trading as PhoneLine) has accused Orange Corporate of approaching one of his Corporate customers by offering them a better deal.

Orange Corporate offered my customer free Nokia 8210s and Nokia Premicells. I am fed up. Orange is taking away my livelihood Lynch claimed.

However a few hours after contacting us he retracted his complaint.

Ive spoken to Orange and they have agreed to give me my customer back. They apologised and told me I should have gone to them first not Mobile News Lynch added.

Lynchs supplying distributor is Midland Distribution. Its national sales manager added:

Theres no problem between Orange and Premier Line. Orange will allow him to offer the deal to his customer at Orange Corporate rates. Orange admits there is a problem with crossover between its direct sales department and some dealers. But is doing all it can to support its dealers.

Orange vice president for business solutions Richard Hanscott told Mobile News:

Our direct sales force focus has been changed so that they are no longer focusing on the small business sector. They will focus solely on the medium and large business sectors.

We have a new process where our direct sales force must check with corporate customers to see if they are already in discussions or doing business with a dealer. If they are the direct sales force will leave the business to the dealer.

Hanscott said that Orange was able to use its customer database to help its direct sales force avoid approaching dealers customers. But he says customer databases are not available to the direct sales team.

They could use it to canvass dealers customers. If they had access to this information they could avoid approaching certain corporates. But its a case of damned if you do and damned if you dont. Its better if the direct sales force dont have access to the information.

Hanscott admits dealers are rarely able to compete with Orange Corporate on price. He said that Orange is looking at ways to manage pricing issues.

John Peck of Wigston dealership Telafonic Wireless Media says Midland Distributions franchise arm Midland Communications has unethically used data provided by Orange for processing commissions to approach his former customers by phone and text message.

Peck claims he purchased a Midland Phone Line franchise in July 1999 but terminated it last January. He says that Midland was offered the opportunity to buy back the business and customer base but declined as they owned the premises.

He alleges that within two weeks of vacating the premises Midland opened up its own franchise and within six months had started canvassing former customers by phone and text.

I dont know how Midland can be allowed to do this. They blun-dered by calling a former customer of mine who is now my business partner and offered him an upgrade phone.

I connected the phone originally and the only way that they could have obtained the information is via Orange says Peck.

Orange provides its distributors with a connection record giving them a customer name IMEI number and telephone number so that they can process commissions. That information should not be used by a distributor to grab customers. I dont think its right.

Midland Distribution MD Mark Liley replied:

Mr Peck was allowed to move into one of the buildings owned by us and he fitted it out. He was allowed to use it and then he walked away.

If he sold the business or walked away then he left the customer base with it. I agree no (Cont P2)distributor should target his dealers customer base. But thats not the case here.

Peck insists that Liley was not handed back the business. Only the building.

We offered Midland the business. They didnt want to pay for it.

They told us that if we didnt want to run a franchise operation we would have to clear out because the building belonged to them.

We gave them back an empty shell. Not a going concern. In any case the shop was shut for two weeks after we handed the keys back to when they re-opened.

Peck admits he bought a customer base but not the one he sold.

Midland never purchased anything back from us. When we bought the shop there were only about 350 or so customers. We increased this to more than 2500. I would gladly have sold them the customer base. But they didnt want to buy.

Peck reckons that Midlands use of customer information has serious implications on the industry.

I dont think its right that they can use customer data without the permission of the customer. A dealer takes a customers details and passes that on to Orange.

The distributor only gets that information to process his commission claim and for no other reason. There are some issues with the Data Protection Act if data is being used without customers consent.

There are a lot of franchise operations being offered to dealers but there is no legislation or governing body to ensure that these are supported properly.

Distributors want to form closer ties with dealers through these franchise agreements and branding exercises.

But it can be dangerous because dealers can find their customer base tied in to their distributor or the owners of the franchise without them realising it. Dealers need to understand what they are getting involved in warned Peck.

Your Communications faces clawback bills from Vodafone after dealers claimed commission for up to 12000 SIM cards never activated (Mobile News May 29).

We are working very hard with Vodafone who are being really understanding. Vodafone has been kept fully informed throughout said Your Communications MD Hugh Logan

We find ourselves in a very regrettable situation but we have to manage our way out of it professionally and thats what we are doing. I sincerely hope it hasnt done us any harm in the long run. People on the receiving end have limited experience of these deceptions. When these guys set out to scam you they make sure they have every avenue covered. They adopt a completely professional approach to the scam.The situation accurately reported in Mobile News didnt arise as a result of our being hoodwinked over one incident. We were told a story which was totally plausible. And we fell for it Logan admits.

At the same time Your Communications dealer manager Gordon Marks has resigned following the departure of his former bosses Tony Woolhouse and Andrew Bullock. Marks said his position had become untenable.

As national dealer manager all deals put on the table would have come through me. Ultimately my former bosses signed them off. Now they have gone it has become difficult to continue in my position.

Marks says he and Your Communications were victims of unscrupulous customers.

This follows revelations from Mobile News (May 14) that two Nottingham dealers were facing investigation for thousands of unused connected SIM cards. The dealers paid the first years line rental for the customer but were still in pocket after receiving commissions.

Sony Cellular was also hit by the same scam before Intercell became aware of its problem.

Your Communications director of mobile communications Paul Lawton said four dealerships are being investigated.

MCC of Nottingham (also known as Mobile Accessory Company or MAC international) is run by a Mike Lawson. It is being investigated for connecting over 7000 handsets to Ilkeston Co-op travel. Lawson earlier connected 1200 handsets through Sony Cellular before doing two large deals for 2300 and 5000 handsets through Intercell.

Internetworks Telecom of Stafford connected approximately 4000 handsets of which 3000 remain activated but unused to date.

Skynet a Northern-Ireland dealer connected about 1400 handsets of which 1200 remain unused. Gloucester-based Bowmont Communications has since ceased trading.

Lawton said the total figure of about 12000 connections being investigated is correct.

The figures you have obtained are about right. Vodafone flagged up a large quantity of numbers where there is little or no usage.

Lawson confirmed Your Communications could be heavily penalised if the connected SIM cards remain unused within the first six months. After this Vodafone can recover significant sums from us including their initial outlay he said.

Lawton said the Ilkeston Travel Co-op deal involved over 7000 SIM cards and will do the most damage to the company.

The Ilkeston deal has hurt us the most because only a fraction of the SIM cards have been used. But there is a big difference between that and the next significant deal with Internetworks which affects some 4000 numbers.

We have met with Internetworks. They have proposed what they intend to do to get these SIM cards into customers hands. The problem was flagged up by Vodafone because these SIM cards had been connected to the network. But after 60 days only 200 of the 4000 SIMs connected by Internetworks Telecom were making calls. We have now reached 90 days and 1000 of the 4000 SIM cards are now being used. It doesnt look like another Ilkeston situation.

Lawton could not explain why these dealers were able to connect thousands of phones to the Vodafone network and pay line rental before any customer purchased them. He declined to accuse the dealers of wrongdoing.

We probably made the deal too attractive They felt they could sustain the line rental for a few months until they had sold the SIM cards to customers he states.

We raised the alarm when Vodafone flagged up non-usage. We alerted our dealers and told them to be aware of the problem and to explain why there is non-usage if it applies to them. If after six months there is zero bill Vodafone can recover costs and payments. We may have to switch several of those SIM cards off.

Weve tightened up our procedures. If after the six months SIM cards are still seen to be unused and Vodafone implements clauses in the contract we will be liable for financial penalties. But weve made provision for those implications. It will not threaten the business.

Lawton says it is not possible to immediately disconnect all 12000 so SIM cards.

We cant switch them off until we know which ones are live and which are not. If we are certain theres no customer in possession of a particular SIM card well tell Vodafone. We will then decide whether to disconnect the handsets. It is dangerous to have live un-used SIM cards. If that is so we can let those numbers run out or disconnect them. The cost differential to us is minimal.

Lawton admits clawback action may have to be taken against dealers who have connected large amounts of unused SIM cards.

There are steps we can take either commercial or contractual. We could be making a mistake to assume that these are all carbon copy situations. We will look closely at each case and decide what actions to take. No-one knows if these connections were opportunist or fraudulent. We cannot strike off a dealer unless they have acted fraudulently or against our views of doing business. If Vodafone claims against unused connections we will try to recover commission from the dealers. But we want a life beyond this present position with our partners.

Gordon Marks said:

Have I been conned or deceived through some of the deals? Yes. Has the company has been deceived? Yes. However I have done nothing wrong. We were told that some of the deals would have very low call spend by the customers. It was a very clever scam instigated by the customers.

Marks admits it was in his own interests to put the deals through for a vast commission.

I would have made good money. But if I had known about the Vodafone clawback clause the deals would probably never been done. It was all dealt with at a higher level than me. I was not privy to Vodafones contract details. There was no mention of anything like that in my contract.

Lawton disagrees that Marks position was untenable.

We havent formally asked him to pay anything back. We have discussed the various possibilities but have not made a formal request.

Primemarks bankruptcy petition against Odyssey for an alleged bad debt was defeated by Odyssey winning an injunction to stop Primemarks proceedings.

A Royal Courts of Justice Judge ruled against Primemarks Petition last Monday (May 21) and ordered Primemark which produces the Foneman system to pay 12000 costs to Odyssey within 14 days. Primemark has its own costs which could be as high as 15000 to 20000 for all three actions it is taking against Odyssey.

Primemark managing director Asif Laher said:

Primemark has issued three sets of actions against Odyssey. One is for breach of copyright. A second is for an unpaid debt. The third was a bankruptcy petition. The case on Monday referred to refers to the bankruptcy petition. The (Cont P2) matters regarding the debt and unauthorised use of our software have not been heard yet.

The conclusion of Mondays hearing does not in any way reflect the merits of Primemarks other two claims against Odyssey.

Odyssey has made pirate copies of our software and is using it to run their business Laher said.

The hearing in regards to their solvency is just a sideshow.

Odyssey joint managing director Russell Park said:

We deny we are using pirated software. Any action against us for software piracy will be defended. If Mondays hearing was a sideshow then it was a very expensive one.

Called m-viron (mobile environment) the scheme is aimed at helping independent adapt to selling the latest technological.Orange and Mainline will provide selected with the resources support and investment to help therm compete with the multiples. Participating dealers will retain total control and ownership of their business. There is no financial commitment.

This is not simply a branding exercise says Mainline managing director Andrew Boden. Its a development in the way dealers a distributor and a network can work together for mutual benefit and long-term success.

Orange and Mainline have been working on the m-viron scheme for the past three years. This was the reason Orange acquired a 28 per cent stake in Mainline.

We have presented m-viron to around 30 quality independents and the response has been positive. The nature of the m-viron package means there can only be one participating specialist in an area. m-viron will appeal to dealers wanting to benefit from a closer distributor/network relationship better marketing and training and a stronger stock supply line. (full story next issue)

The FT Mobile phone package ofers a choice of WAP phones. it includes personalised SMS text updates on a requested industry and sector as well as market reports and company news. Users can call a special number to hear the full stories and can personalise the WAP site to prioritise news and live share quotes.

The Carphone Warehouse is responsible for distributon of the phones through its stores and direct call centre. It will also be providing all after-sales care and customer support.

The FT Group says it has received more than 6000 advance registrations for the service.

Dabcom went under following a 2 million call routing swindle that hit its least-cost call routing arm KaLL International (Mobile News May 14).

The fraud went through one of its switches and allowed customers to call Asia at European rates.

In May the company said:

KaLL International is independent from Dabcom Ltd trading as KaLL the mobile phone distributor and this action will in no way will no way impact that business.

KaLL is now being run by Administrative Receivers Kroll Bulcher Phillips in Grosvenor Street London.

Kroll Bulcher Phillips spokesman Lee Manning exclusively told Mobile News.

Dabcom appeared to have its fingers in too many pies. Now that KaLL International and Dabcom have ceased business the whole operation has failed. Its a terrible mess. We are trying to see if any of the businesses can be saved. Dabcom is finished because it sold off the customer base.

It is understood that Dabcom chairman Dave Breith may be forced out of his home as a result of Dabcoms crash. It is understood he lives in one of the company properties.

Breith told Mobile News:

We did everything possible to avoid this but were unable to prevent this course of action.

Manning added:

Were not quite sure what Dabcoms liabilities are. Its a real mess. It is owed money by Orange. But in turn could owe Orange as much as 1million. We reckon that 90000 is owed to the Inland Revenue in tax. The banks are owed 500000.

Manning revealed that dealers are owed about 70000 in unpaid commissions. But Northampton Orange and One 2 One distributor Elite Business Systems (EBS) has bought KaLLs customer base and says it will pay the commissions conditional on dealers doing further business with EBS. (Cont P2)

EBS chairman Ray Kingston said:

EBS can confirm the acquisition of the KaLL dealer base We will be making arrangements with dealers concerning the commission owed by KaLL for connections made between the April 22 and the June 9.

Kingston warned that some dealers might not be paid all commissions they are owed by KaLL.

We cant go back six months. We agreed with KaLL to pay commissions from the last few weeks because thats where the majority of the money is owed. If dealers are owed money from before April 22 they will have to go to KaLLs Receiver.

Dealers who want their commission have to commit to us. We were given the base on the understanding that we paid dealers the outstanding commissions and continue to serve them. If we pay their commissions and look after them we hope they will stay with us because of the service we are giving them. Not just the fact that we have paid them. We have recruited four of KaLLs dealer managers so that dealers can continue their relationships with us.

Some dealers may choose not to work with us. If so they wont be paid. Some dealers have signed up. We want to work with them. We dont want to see people go bankrupt.

Kingston refused to confirm that 70000 is owed saying its complicated.

Manning believes KaLL sold the dealer list to EBS too cheaply.

Theres nothing we could do. The sale to EBS took place before we became involved. There were about 192 dealers on the list.

Manning says KaLL Internationals 2 million call routing swindle (as reported in Mobile News on May 14) hit Dabcom despite Breiths assurances a month ago that it was business as usual.

However Manning said Dabcom guaranteed liabilities of 400000 to Worldcom which supplied fixed phone airtime to KaLL International. Dabcom was also supporting a number of smaller loss-making operations paying wage bills and ordering stock. It has run up a massive bill with Orange on stock it supplied to another loosely affiliated direct-selling operation called Claritel.

The call selling fraud that sealed KaLLs fate involved customers entering a set of keystrokes on their telephones before making a call that allowed them to pay lower European rates for their calls when ringing countries in Asia.

The fraud came to light following the recent earthquakes in India when call volumes rose significantly. KaLL rushed to close the service and suspended it indefinitely.

The company issued a statement admitting:

KaLL International Limited was established in May 2000 and is a re-seller of least cost routing and wholesale fixed line products. In February this year it became known that the company had been hit for substantial fraud through their switches the (Cont P2) total of which is still being reconciled. As a result the business has been placed on hold pending an enquiry from KPMGs forensic team to ascertain the future of the business and liability for the debt. KaLL International is independent from Dabcom Ltd trading as KaLL the mobile phone distributor and this action will in no way will no way impact that business.

A spokesperson admitted that KaLL has no idea how long the fraud had been running for and but warned that estimates of 2 million losses were premature. The trick involved customers entering a set of keystrokes on their telephones before making a call that allowed them to pay lower European rates for their calls when ringing countries in Asia. The fraud came to light following the recent earthquakes in India when call volumes rose significantly. KaLL says that the service has been suspended indefinitely.

KaLL was established in the UK in 1994 under the name A to B. It started as a mobile dealer for all four networks. In 1996 the company decide to work solely with Orange

In 1998 the company entered the fixed line telecom market and established Telesse to specifically target dealers of fixed line products and services.

In April 200 both A to B and Telesse were rebranded KaLL followed shortly after by the creation of the least cost routing business known as KaLL International.

Chitter Chatter director Leonard Leeson told Mobile News that a number of shops had been on the market but these have been withdrawn.

None of our stores are on the market. Any stores that have been on the market have been withdrawn. We are very close to One 2 One and are one of their key customers. We re-assessed the market and decided that business will improve. Every business has to make decisions based on whether its stores are profitable or not.

Leeson denied industry reports that Chitter Chatter stores in London and the South of England were being sold because they are unprofitable due to One 2 Ones plans to withdraw loyalty commission payments.

But Leeson did hint that the chain might be for sale at the right price. Chitter Chatters London outlets are in Kensington Covent Garden and Oxford Street. (Cont P2)