Staff Reporter

The stores will be located on Londons Oxford Street Manchesters Market Street and in a major shopping centre in the south-east of England thought to be Bluewater.

The stores in London and Manchester are set to open in the first week of June while the last details of the third store are still to be finalised.

The operator is also looking at how the Experience concept would work in smaller existing Vodafone stores.

On the expansion plan Vodafone head of retail Richard Daly said:

The store on Oxford Street will be spread over two floors and will have more than 3000 sq ft of floor space so it will be a lot like The Carphone Warehouse flagship store.

He added: But we are also looking to see how the experience concept can be incorporated into an existing store and we are looking at the store in the Lakeside shopping centre which has only around 1000 sq ft of space.

According to Daly following the opening of the three stores Vodafone will wait to see customer feedback before deciding whether to open a new round of stores.

The Vodafone Experience concept was first unveiled in Watford in May 2003. After its success a second store was opened in Cardiff in November. The Cardiff store is the networks largest store with an area of 1600 sq ft.

The strategy is still to have around 10 stores by the end of the year and then possibly 20-30 by the end of 2004 added Daly.

With Vodafone live! and the concept stores we have had the first chance to see how much greater a focus we can place on services when we have our own team working in our own stores.

Jones departure comes three weeks after the Swindon-based service provider was bought by Vodafone and just two weeks after Vodafone director of customer management Joe McLoone told Mobile News that it was to be business as usual for the company with current staff staying at least until May.

Jones had been with the company for five years and many were surprised that he stayed after managing director Nigel Bunter and chairman Ric Lee left.

According to Jones his departure is perfectly happy and one of those things.

I genuinely dont know what I am going to do next he said. I will probably take a month or so off and go on holiday. I will then come back and look for work.

Jones has been in the industry for nearly 20 years. In that time he has been sales director for Nokia where he stayed for six years and managing director of Dextra Phones4U and Caudwell International during a three-year stint with the Caudwell Group.

I have spent many enjoyable years in the mobile industry and would love to come back provided I can find the right sort of position he said.

According to Vodafone the change was driven by the requirement to implement a more consistent approach to distribution policy across all Vodafone channels.

Chris joined Cellular Operations in January 1998 and personally made a considerable contribution to its development growth and success said Tim Bean general manager of Cellular Operations.

Apologies to Elite Mobile for this oversight.

The rest of the subscribers come from the remaining seven countries that have the service.

The service was launched at the end of April and will soon be rolled out in Egypt Australia and New Zealand. It offers picture messaging downloadable polyphonic ring tones and colour games and branded infotainment through an easy-to-use icon-driven menu.

Vodafone Group chief executive Sir Christopher Gent said: To have launched live! as a global service and to have reached one million customers in just over five months is a tremendous achievement. Vodafone live! is the most successful mobile data service ever launched in Europe with activation rates gaining momentum since the new year.

The new stores mean MoCo will meet the target of 30 stores by June that it set at the start of the programme in November 2002.

Managing director Ian Robinson said: It is very pleasing to see that there are dealers out there who can see the benefits of the scheme. We have always had faith in the programme and think it is a sensible solution for what are very tough times for dealers.

MoCo Cell Link initially opened 14 stores in Northern Ireland as part of its expansion bid and followed this up with six other stores in the Kent Sussex and Cambridgeshire area. The new stores are all situated around the M25 area.

As part of the programme dealers run their stores under the MoCo brand and benefit from national advertising and specialist support including administration and IT and access to the latest promotions and products from the networks but retain their own staff and name.

At the moment we are currently looking at getting the signs made up and other little things sorted out but it is a very positive sign said Robinson.

The most important thing is that we have the backing of all of the networks.

MoCo is also a distributor for O2 and an Orange Business Specialist.

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The network took charge of the Swindon-based service provider three weeks ago.

Two weeks ago Vodafone director of customer management Joe McLoone assured dealers that there would be no immediate changes to the commission payments (Mobile News March 24).

McLoone even hinted that some of Cellular Operations most successful packages might last beyond the planned May review.

It was thought the comments were aimed at easing dealers fears that the popular and lucrative bespoke tariffs would be dismantled.

McLoone had said: We dont want to tamper with something that has been very successful. We arent going to make immediate changes before we have a look at the business in detail.

But Vodafone last week slashed the commission payments on the bespoke tariffs by 80 with a further 40 coming off the majority of the other tariffs.

A spokesperson said:

Vodafone felt it was important to immediately bring in the same subsidy reductions that have been introduced elsewhere in the marketplace as a result of the Competition Commission findings.

It is still close to the acquisition and we are still understanding the business and its dealer activity.

Cellular Operations sales director Chris Jones quit last week (see story P4).

Cellular Operations won Best Service Provider at the Mobile News Awards on March 27 for the second year running.

Last July I asked a key industry figure with board level insight into all four networks for his opinion of T-Mobiles UK management style. Busy fools he replied.

I found this remark significant but not surprising. Our relationship with T-Mobile was on the rocks following the management change from One 2 One.

An aggressive group of Campbell-esque PR suits made it clear they expected Mobile News to only report sanitised announcements.

We were advised to look at the bigger picture rather than run stories about T-Mobile of relevance to the dealer channel which the network regarded as irrelevant and inaccurate. They demanded to know what right we had to decide what news people should read about T-Mobile.

Dealers who criticised T-Mobile to us were apparently not well-informed and were invariably mistaken. Why were we not publishing the glowing accounts of thousands of dealers who were happy with T-Mobile?

Consequences

Should we not play ball the consequences were made clear starting with an overt threat that we would lose T-Mobiles advertising.

We declined to comply and quickly became persona non grata. Overnight access to T-Mobile executives was withdrawn. Routine enquiries were met with obfuscation. Of course the advertising was pulled.

I assumed this bizarre conduct was confined to a small cabal of lower-echelon empire-builders. Surely T-Mobiles leaders guided the business with wisdom concern for shareholder value and professional courtesy?

Not quite.

It seems the culture of aggression and alienation ran from the top down. Anyone who fell from favour would be treated accordingly as was indicated by Mr Justice Cookes explosive 54-page judgement of T-Mobiles failed case against Virgin and its joint venture business Virgin Mobile and his later comments in a separate hearing in which he ordered T-Mobile to pay all of Virgins and Virgin Mobiles costs.

The judges comments show T-Mobiles mindset of confrontation was pervasive as revealed in the way it tried to extricate itself from the joint venture with Virgin another legacy from One 2 One.

Having decided to divest itself of Virgin Mobile you would expect T-Mobile to have negotiated a mutually-agreeable exit route. Surely this is what joint venture partners do all the time?

Instead when T-Mobile found its desired exit route barred managing director Harris Jones and his advisers activated an obscure legal formula to reduce the Marketing Support Contribution (MSC) T-Mobile would pay to Virgin Mobile.

Put simply T-Mobile knew it was gambling with loaded dice but never believed it would be exposed as a cheat.

To use the judges words their exit strategy was designed to place the maximum pressure on Virgin. For if these payments fell below a critical level a no-fault termination clause would be activated leading to the destruction of Virgin Mobile under its current ownership. All to the commercial advantage of T-Mobile.

So armed T-Mobile ambushed Virgin with a skewed revenue formula that omitted text message revenue.

This significantly reduced the MSC and triggered the clause that would wind-up the joint venture.

Virgin resisted and the battle commenced. After a hearing in the Royal Courts of Justice Mr Justice Cooke dismissed T-Mobiles claim saying:

It (i.e. the calculation) was not only flawed it was deliberately skewed to achieve the lowest possible result. Mr Justice Cooke added: There is no possible basis on any view of inbound interconnection revenue to exclude text revenue and to work solely on the basis of voice calls.

This is however what T-Mobile did. These defects in themselves render the calculation non-contractual … the inference is clear that T-Mobile made a calculated decision to use the termination provision of the Joint Venture Agreement in an attempt to secure commercial advantages to itself at the expense of Virgin Mobile and Virgin.

Surprisingly neither Harris Jones nor joint venture board director Julia Chain gave evidence. Nor were they in court to hear Justice Cooke refer to the unanswerable criticisms of their calculations.

Skewed

Ironically T-Mobiles fight against Virgin did not inhibit it from exploiting Virgin Mobiles success. Keen to haul T-Mobile out from fourth place Jones added Virgin Mobiles 2.3 million subscribers to its UK customer numbers to persuade journalists and analysts that T-Mobile was now bigger than O2.

Key questions now emerge.

How could T-Mobile possibly think its skewed revenue formula could withstand the scrutiny of a High Court judge?

How could Harris Jones and T-Mobiles lawyers mount a case they knew to be based on a skewed engineering of the no-fault termination?

Did Jones and the other conspirators in Virgin Mobiles demise forget that Virgin under Sir Richard Branson had a track record in seeing off assaults from corporate giants?

Had they forgotten Bransons battle against British Airways and its notorious dirty tricks campaign which humbled even the great and good BA chairman Lord King in court.

Joness fellow American the great showman PT Barnum once said you cant fool all of the people all of the time. Jones should have remembered that.

Deutsche Telekom shareholders already smarting from their company losing billions must have been mortified to see T-Mobile wasting millions on a doomed court case against a joint venture partner based on a flawed formula.

Brutal

We will probably never know if the edict to sue Virgin in such a brutal way was Joness own plan or those of his masters at Deutsche Telekom. Nor are we likely to find out if his subsequent resignation was as a protest to any orders he may have been given or if he had a premonition that his conduct would be questioned by one of the highest authorities in the land.

Whatever Jones will soon leave the building – no doubt with the grateful thanks of enriched lawyers ringing in his ears.

Meanwhile we hope that the departure of Jones results in a less combative culture at T-Mobile. We know there are people within T-Mobile perplexed at the change in attitude since the One 2 One days.

Perhaps with a new managing director soon taking the hot seat the previous climate of co-operation will return.

Finally let us remind ourselves of the contents of one of T-Mobiles recent press releases to announce its provision of virtual network facilities to BT.

T-Mobile UK believes in the importance of strong and effective partnerships.

We wonder what Sir Richard Branson and Virgin Mobile head Tom Alexander would have to say about that.

Arculuss appointment comes at the same time as current chairman David Varney steps down to a part-time roll. Varneys move was agreed when O2 separated from BT Cellnet.

Arculus is currently a non-executive director of Barclays and of the Earls Court and Olympia exhibition venues. He is also chairman of water services company Severn Trent.

UK chief marketing and data officer Kent Thexton has also been promoted to the mmO2 board as has O2 MD David McGlade

Britannia Airwaves was the retail arm of the Cityphone/Britannia group and purchased its stock from Pointgold. Another group company Britannia Telecom owned the Talk4All shops. Talk4All staff were employed by Britannia Retail.

The liquidators said Britannia Group started in early 2000 but by March 2002 had been loss-making.

The company aimed to expand to a critical mass of 100 stores. Funding for the expansion came from Pointgold (Cityphone) and One 2 One. The companys financial position was improving but was dependent on One 2 Ones support of Pointgold.

Regrettably however the support was withdrawn in September (2002) and as a result Pointgold went into administrative receivership on 23 September 2002. The group of companies could no longer continue and all three companies ceased trading immediately the report said.

Neither Donaghey nor his partner Paul Williams was available for comment. T-Mobile declined to comment saying: It is not our policy to comment on individual businesses the management and direction of which being outside our remit.