Staff Reporter

The company connected mainly One 2 One handsets and airtime through stores in Clapham Tooting Streatham Camberwell and Maidstone. It went into liquidation on December 21 last year. North London-based insolvency specialist R. Valentine & Co is the appointed liquidator.

NatWest Bank and (Cont P2)

One 2 One are understood to be the main creditors. It appears falling sales and squeezed margins forced the company out of business. In the year ending December 1999 turnover fell from 6.5 million to 2.5 million while profits fell from 36800 to 9062. These figures fell further as sales within the industry slowed throughout 2001.

In July 2000 the company changed its retail trading name from World of Accessories to Mobile Phone House saying the brand was confusing to customers. It retained the World of Accessories name for its own branded accessories.

Generation Telecom is tipped to be close to acquiring a Vodafone service provider for its subscriber base. Genesis Telecom and Global Crossing have been named by industry sources as the targets.

Nash will report to his old chief at Ericsson Generation Telecom managing director Keith Westcott. Nashs role will be to establish a new sales and marketing team and bring on new subscribers. (Cont P2)

Westcott told Mobile News:

I have worked with Barry Nash over the last eight years. I became aware that he was being made redundant at Ericsson and was keen to secure him to Generation Telecoms management team (full story next issue).

Joint administrative receiver Neil Geddes of Manchester-based accountancy firm Levy Gee said:

It is unlikely that the company will be resurrected in its current form. I could not rule out some of the staff being offered alternative posts elsewhere but again I believe that is unlikely.

We have received financial offers for certain parts of the business. I hope to be in the position to accept offers for those areas of the business we are looking to sell within the next few days.

Geddes said that it was too early to say whether the executive directors of The Phone People would face statutory investigation over the millions of pounds of losses.

No significant impropriety on the part of the executive directors has been brought to my notice as yet. The industry is undergoing significant structural change (Cont P2) and it appears that the company failed to deal quickly enough with the operational issues inherited from its predecessor.

It is disappointing that it has been necessary to discontinue trading operations. But there still remains the prospect that certain aspects of the business can be sold and we are looking for early expressions of interest.

Geddes is seeking offers for The Phone Peoples retail sites intellectual property and phone replacement business (see P14-P16).

A row has broken out between South Wales-based dealership EHD Telecom and Burton-on-Trent Orange distributor Mainline over 20000 in unpaid commissions.

EHD claims Mainline is refusing to pay them commissions due for connecting customers to Orange.

However Mainline says it is not happy with the quality of EHDs connected customers and wants to see copies of customers proof of address and IDs before it will release the money. Mainline has also terminated EHDs dealer agreement.

Mainline managing director Andrew Boden told Mobile News:

Mainline has chosen not to continue to do business with EHD telecom on the basis of subscriber quality.

We will pay the balance of any money owed once all unpaid stock is returned and we have received copies of customer proof of ID and address as stated in our trading terms.

We have received a statutory demand from EHD. These have been passed to our solicitors. Unless we see the documents requested we will hold commissions until the (Cont P2) claw-back period of six months has expired. We have tried to be reasonable. We have offered to pay EHD for the time and cost to produce copies of the documents we require. But it has fallen on deaf ears said Boden.

EHD managing director Eileen Davis claims Boden either does not want to pay or is unable to. She told Mobile News:

We have served Mainline with documents relating to the insolvency act for non-payment of around 7000. The total figure owed to us by Mainline is between 20000 to 25000.

We will issue documents over the remaining amount. Andrew Boden has not been able to agree payment terms with me. I dont know if he cant pay or wont pay.

There is an open door for Mainline to settle up. It is now down to the courts to decide payment terms.

Mainline only terminated our trading agreement after receiving the demands. We have nothing to hide. Our documentation is open for Mainline to see.

The service which was introduced to key dealers at a low-key trade launch in January has now been shelved because of adverse conditions on the telecoms market.

The decision is a blow for Caudwells distribution arm 20:20 Logistics which won the contract to source and package SIMs and handsets for the

OnStar service and deal with all admin dealer training and trade customer service.

One 2 One would have been the partner network.

An OnStar spokesperson confirmed the service had been shelved but declined to give any factual details.

A spokesman for 20:20 Logistics said:

We were appointed to look after product distribution sales and dealer support for General Motors virtual network in the UK and it is very disappointing to hear that the launch hasbeen delayed. Under the current market conditions however we fully understand this decision and now look forward to working on the OnStar project in the future when the time is right.

As well as being a mobile phone voice service the plan for OnStar was for a personalised web portal that learned the personal lifestyle preferences of its users and could act as a 24-hour virtual assistant.

The service would have been accessed from mobile phones PCs special in-car terminals (likely to be fitted to GM vehicles) and fixed lines to a customer service call centre.

In the USA OnStar offers GM vehicle owners GPS location and recovery telematics services such as remote diagnostics remote door unlocking and automatic notofication when an airbag is triggered.

It is believed only 30 mainly-engineering staff remain to maintain the network.

Deloitte and Touche confirmed the layoffs saying: it has been necessary to downsize the Dolphin workforce.

But the administrators are continuing to deal with the day-to-day operations of the business with the support of the retained employees and the customers and suppliers of Dolphin.

While it is too early to state if and when a sale may be concluded every effort is being made to preserve the business.

Deloitte and Touche had set a deadline of September 14 for potential buyers to put in a bid for Dolphin UKs business and assets including its national network which remains operational. (Cont P2)

The deadline passed with no firm bids received. Dolphin passed into administration in August with debts estimated to be $1.2 billion.

Dolphin provided business TETRA communication services to 273500 subscribers across Europe.

The UK network was launched in August 1999 but by August 2001 had only attracted 76000 subscribers.

In November last year Dolphin admitted it had yet to secure financing needed to fulfil its 2001 investment plans.

In December the company announced it required a further $700 million of funding to carry out its plans to rollout new networks second generation handsets and maintain services over the network.

The company ran up huge losses caused by rolling out and launching the network subsidies on handsets and marketing spend. It covered 90 per cent of the UK population.

Westcott who spent nine years at Ericsson has been offered an equity stake in the company.

He had only just been promoted to vice president of Northern Europe following the return from Singapore of marketing manager Alex Rodrigues who is now in charge of Ericssons mobile operations in the UK.

Keith will be joining us very shortly said Kondor founder Malcolm Bartlett who has also appointed Malcolm Benson as chief executive officer. Benson was formerly CEO of retail Software Company Matra Systems.

We are delighted to have secured two such strong candidates here with complementary skills.

Keith Westcott brings his tremendous experience and good standing in the industry while Malcolm Benson has extensive experience in distribution and sales.

These are two big hitters. We will get a good result from it.

Bartlett says Westcotts decision to leave Ericsson is a reflection on Kondors ambition rather than Ericssons troublesome year.

We are offering Keith some equity and it is an exciting change. He has the opportunity to help grow this company and enjoy the benefit of it. You dont get this opportunity in a more corporate environment. (Cont P2) Ericsson has an exciting future and its deal with Sony could revitalise the company.

Keiths decision to move is not due to any disenchantment with Ericsson. The important think for Kondor now is focus on our acquisition program and keep growing. Well be better equipped to do this with Keith Westcott and Malcolm Benson on board.

4500 jobs are to be shed worldwide as part of a restructuring programme to cut losses caused by the failure of an analogue cordless telephone business it purchased from Lucent. Vtech is suing Lucent for $170million claiming Lucent misrepresented facts relating to the purchase.

A spokesperson said

We are closing the R& D centre in line with the companys global consolidation strategy with 45 redundancies. UK sales and marketing staff will move to Farnborough. The closure will not affect continuing sales and marketing activity for VTech mobile products in the UK. R&D activity will move to (Cont P2) VTechs operation in Calgary Canada where we are developing mobile phones for the US market.

VTech sales and marketing director Robert Moran denies that redundancies of 34 R & D staff who developed VTechs GSM phones will affect the business.

Creditors will vote on the offer at a meeting on June 19 to be held at the Clifton Ford Hotel in London.

Administrators Levy Gee took over the affairs of Paragon Global (formerly Fone Range UK) on March 20 after a series of Winding Up Orders and statutory demands were served on the company.

Fone Range lost 708000 in the nine months to December last year.

Fone Range founders Jay and Vimal Pau set up a subsidiary called Fone Range Partnerships which is now trading under the name Blue-I International.

This has the licences to distribute accessories for Warner Brothers and Coca-Cola. The administrators say it is believed that company has a viable future.

The Creditors Voluntary Arrangement depends on Blue-I paying the administrators 300000 in six instalments of 50000 every quarter from next June for the Goodwill of Fone Range/Paragon. This will give unsecured creditors their estimated dividend of 9p in the 1.

Administrator Shay Bannon said:

The meeting has been called to explain to creditors the situation and outline the proposals contained in the letter to creditors.

The decision to go into liquidation or to enter a voluntary arrangement will be decided by us depending on which is the least expensive option.

Bannon declined to comment on the proposed deal with Blue-I. Meanwhile auctioneers Philip Davies has been appointed by Bannon to sell off 750000 of accessories belonging to Paragon (Fone Range).

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.