Staff Reporter

M-fusion was launched in February last year by Euro Cellular founder Win Donaldson to offer SIM-free handsets and handset applications.

Donaldsons other global handset business Euro Cellular shared its Sutton offices with m-fusion and continues to trade in grey market stock.

M-fusions demise follows the liquidation last month of Euro Cellulars content-creation business Mad Box Media with debts of around 1 million (Mobile News January 27). (Cont P2)

London Insolvency specialist Hacker Young is handling the liquidation of both companies.

Mad Box had just signed a big deal with MTV to create ring tones and other mobile content which would have been distributed by m-fusion.

Rumours suggesting that Euro Cellular or one of its subsidiaries were in financial trouble had been circulating the industry for months. But Donaldson and Euro Cellular group managing director John Redgate had always strongly denied this.

At the time of going to press neither Donaldson nor Redgate were available for comment.

She alleges a number of incidents and said Siemens and Bate were served the papers at the beginning of this month.

They were due to have responded to the claim this week. Once the response is received by the Employment Tribunal Service Fowler Siemens and Bate will have to wait for a hearing date to be set before a final decision is made. Fowler confirmed proceedings had commenced but declined to comment further.

Siemens and Bate also declined to comment.

Netcollex is the internet arm of David Sullivans publishing empire that includes The Sport Newspapers Private shops as well as various internet and other adult enterprises.

Chief executive Rob Johnson said the company is currently developing its content database for a range of mobile services. As well as providing services direct to the consumer Netcollex will provide adult material to a number of content providers.

Netcollex is now able to stream video to the Nokia 7650 and will be capable of going live with content in a matter of weeks.

Adult content will be a huge market in the next couple of months. Video will be the thing that really pushes the services. It is just about to happen and we will have the content he told Mobile News.

Netcollex has approached all the networks but has yet to sign any agreement.

Johnson is confident it will just be a matter of time. (cont P2)

Vodafone live! has said it is not going to have adult content. At the moment all the networks are trying to control content on their servers and ring-fence the content so that it doesnt explode like on the internet. But it will just be a matter of time before it does.

We have seen an explosion with our adult chat product using reverse-billed SMS.

When pictures and video are ready the same will happen.

Both 3 and Virgin Mobile have admitted that they will be offering adult services to their customers in the future. While 3 has said that it plans to make gambling the centre of such services with other adult services taking a back seat Virgin maintains that it will be offering fun and racy content that can currently be seen in mens magazines such as FHM and Loaded (see full story P22).

And its overall connections for the first three weeks of this year are up 21.8 per cent over the same period in 2002 helped by initiatives such as Vodafone live!.

These latest figures were announced in a third quarter trading statement.

This also showed that connections for the whole quarter increased 16.3 per cent to 1.32 million.

Carphone Warehouse (cont P2) shares which had slumped after Dixons announced a poor Christmas trading period recovered some ground to 65p.

Carphone Warehouses own customers on its Fresh virtual network (hosted by T-Mobile) were up 10 per cent to 176000. Its insurance base increased by 14.8 per cent to 976000 customers.

These are stronger figures than most people were expecting and stronger figures than some of our competitors have reported. We had a good Christmas and a good third quarter. This positions the group to deliver pre-tax profit in line with market forecasts said chief executive Charles Dunstone.

Importantly this growth did not come at the expense of margin. Our gross profit on subscription and pre-pay connections remained in line with the previous year.

The new product pipeline is healthier than it has been for some time. The increasing popularity of camera phones and picture messaging will help drive demand for new handsets. The launch of a commercial 3G service may further stimulate the market.

Dunstone confirmed The Carphone Warehouse will launch its fixed-line telecoms service in its UK stores next month.

As a trusted mobile telecoms adviser connecting more than two million customers in the UK each year we are uniquely placed to offer compelling rates and deliver significant savings on customers home phone bills he said.

The networks stand to lose 1.5- 2 billion as a result of the regulations reports Paul Tweeddale.

Vodafone UK chief executive Gavin Darby told Mobile News:

It is a bleak day for the industry. The decision will have wide-reaching affects across the industry. Both Oftel and the Competition Commission have miscalculated the cost of running a network and as a consequence the judgement into the termination charges is wrong.

There is no question that this will result in the removal of whatever subsides are left in pre-pay handsets a reduction in subsidies for contract and a slowdown in the reduction of tariffs.

Orange executive vice-president John Allwood said Orange is also likely to mount a legal challenge.

We are considering requesting a judicial review to ensure that the Commissions report does not unfairly penalise mobile customers he said.

O2 said it would have to reduce handset subsidies and delay the planned launch of commercial 3G services until the second half of 2004. (see full story P12)

This follows its decision to sell its products exclusively in The Link until the end of the year.

One.Tel head of mobile Asif Aziz told Mobile News last week that One. Tel aims to emulate Virgin Mobile by having a strong high-street presence.

We are looking at independent dealers and other distributors said Aziz. We chose Dixons group to get things rolling. They were keen to work with us and The Link (Cont P2) matches well with the One.Tel brand. Virgin Mobile has been very successful because it is now available in some 6000 outlets in the UK. Thats the business model we wish to follow he continued.

One.Tel is a subsidiary of Centrica group.

It launched in July this year saying it would look to off-the-page advertising and sales to existing Centrica customers.

The company offers a single tariff with a line rental of 4.99 per month with no bundled minutes and call charges to landlines of 15p per minute peak and 5p off peak. Off-net calls are charged at 40p peak and 30p off-peak.

One.Tel offers a choice of eight handsets starting at 39.99 for a Nokia 3410 or Siemens A50 at the low-end rising to 249.99 for the Samsung T100.

Sendo which formed a partnership with Microsoft in 2001 to develop the Sendo Z100 smartphone is suing the American company for allegedly stealing trade secrets.

Sendo claims that Microsoft took the information it gained during the development of the Z100 and passed them to Taiwanese company HTC which later developed Oranges SPV in partnership with Microsoft. Significantly the Z100 never made it to market.

Sendo senior communication manager Marleen van Lookeren says Despite the court case it is very much business as usual for us. We have added a lot more customers over the last couple of months and we are looking forward to doing what we do best creating quality phones.

Van Lookeren says the company has recently acquired new customers in Eastern Europe as well as opening an office in the Middle East.

We have new handsets that we will be unveiling in February or March and we have finance in place to see us through another year.(Cont P2)

According to Van Lookeren the new handsets wont be smartphones but instead will be GPRS camera phones with colour screens MMS and polyphonic ringtones. Van Lookeren says Sendo still plans to release a smartphone with the second half of the year a likely release date.

Van Lookeren is also confident that the court case will not be a protracted affair. From what I understand the Texas courts are very efficient and we should have a result before the end of the year. We will take it as it goes but for us it is business as usual.

Question marks hung over the future of Sendo after Microsoft turned a 8million investment into a loan but Van Lookeren says Sendo received a cash injection at the end of 2002 that will see it through 2003.

The licence cost f114.1 million payable over 15 years. The first instalment has to be paid in advance. O2 already has 3G licences in the UK Germany and Netherlands.

Retailers are missing out on the profit potential of selling downloadable content such as ringtones and logos says a new Mintel report commissioned by mobile content provider M4 on the usage patterns of mobile phone users.

The report says demand for downloadable content including ringtones logos screensavers and games will increase tenfold by 2004 and will be potentially worth 1.5 billion. Of 2000 people interviewed 80 per preferred to buy downloadable content from retailers rather than from the internet or off-the-page dealers.

M4 managing director Steve Hughes says the report highlights the revenue potential in selling downloadable services.

Retailers have been slow to take up downloadable content because they have been unsure about the revenue potential. Few content providers have put together a package that appeals to retailers and offers them a retail margin.

Operators encourage retailers to sell services. But they do not give the retailer anything in return.

The report comes as accessory distributor Dextra launches its new range of downloadable content services which are claimed to allow dealers a 30 per cent margin from 5.99 packs.

Dextra says its aim is to make retailable mobile content packs more available in distribution routes and for high street retailers.

The new packs cover musical artists Eminem and Destinys Child and offer five pieces of content from a choice of ringtones icons and colour backgrounds for the Ericsson T68.

Future releases of artist packs include Blue Atomic Kitten and Oasis.

So said 3 sales director John Barton in an exclusive interview with Mobile News last week.

We are going to give the independent channel the best quality support right from the start. It important for the independent dealer to realise that there is going to be someone to take care of him. Channel partners are treated differently across the industry. Not everybody thanks the channel for doing good work. We recognise the good work that the independent channel does Barton promised. (Cont P2)

We will include all our partners from day one. Im not going to put 3 into a large high street retailer three or four months before the independents. The full spectrum of channels and distribution capability will have phones and services to sell he added.

Networks have been known to offer initial packages of deals and propositions only to selected channels and sometimes to cut out the smaller independent player who can do as good a job as the larger players.

We have appointed Avenir and Hugh Symons as distributors because of the quality of response they gave to our initial request for information. Each of them will take on about 50 or so quality stockists who will work through them.

They will be the highest quality players the channel can deliver.

They will be self-selecting but will have to go through an accreditation process.

We have the final say and will maintain a watching brief. The smaller specialist independent dealer also has a key part to play. We are vetting applications from those who wish to deal directly with us. (see P14 for full interview)

Hutchison 3G also last week announced that The Link will sel lits 3G handsets and promote 3 products and services in its 290 specialist communications products stores across the UK.

West Sussex dealer STS Communications is one of the dealers which has been told that due to a poor connection rate it is no longer suitable to be a T-Mobile dealership.

The company has been in the mobile business since 1984 and used to connect through all four networks. It was once a direct dealer for One 2 One and is still a Nokia service centre for West Sussex.

It is surprising because we are the only dealer in Littlehampton that supplies T-Mobile.

We are only a small independent and we dont make a massive amount of connections but our connections are mainly business users. I thought that might protect us against termination but obviously not said STS owner Mike Browne.

Browne received a letter from his T-Mobile distributor European Telecom confirming the termination. He approached Hugh Symons but was told that if T-Mobile had terminated the dealership he wouldnt (Cont P2) be able to get stock at all.

We were cut by Vodafone direct in May but at least it gave us the option to go through another channel. We found another distributor and it has worked out well on almost the same commission. But T-Mobile says it doesnt want us to be associated with them. Funnily enough we still get promotional posters from them.

European Telecom managing director John Drinkwater said he has been told by T-Mobile to cut a very small number of such dealers.

It is harsh but it is a trend that dealers are wrong to try and fight. T-Mobiles targets for dealers arent unreachable. They are just looking for a certain amount of support from the dealer.

I can see why a dealer would be upset. But T-Mobile has been very clear that it wants dealers that are going to promote it. The move may reduce T-Mobiles business in some areas but it is not going to harm it overall. A lot of networks will think this way.

Dealers will have to decide who they want to support. If a dealer isnt doing a sizable share of connection figures with a certain network then that network wont want to be seen in his store.

A dealer will have to look at his sales and decide which networks he wants to support. The days of a dealer doing all four networks could soon be coming to an end.