Staff Reporter

The offices will officially close in November. Vodafone director of customer management Joe McLoone said he hoped all the staff would take up the offer to relocate in Vodafones other offices in Banbury and Birmingham.

Ideally I would want all of the staff to stay but at the moment I dont know how many want to come with us. The mood is very quiet at the moment which is what you would expect but if everyone wants to move to other offices we have space for that.

With Banbury not too far away it is possible that a large proportion of staff would want to move there. It is a very realistic alternative and it is unusual for a company to be able to accommodate staff in this manner.

McLoone blamed the need to move on the growth of the centre and the limitation of the existing offices. Vodafone acquired the offices in September 1999 following the purchase of Unique Air.

Originally designed for general office work the buildings have since changed function to include a large call centre with an corresponding increase in personnel.

McLoone said the decision to close the offices follows a period of review to consider how to best manage the activities in Abingdon and that decision was taken now to take advantage of a lease break in the building contract.

The figures are the first to be released by the network and came out in the interim results of 3 UKs Hong Kong parent company Hutchison Whampoa.

Although the networks summer offerings were described as very well received the figures will be disappointing for chief executive Bob Fuller considering the millions that have already been ploughed into a national advertising campaign the slashing of tariff costs and the scrapping of charges for handsets.

The one million customer target set by Fullers predecessor Colin Tucker was always thought of as being highly ambitious and since arriving in May Fuller has sought to distance himself from such a figure.

He can take some satisfaction from the knowledge that the majority of the networks customers have joined following his introduction of low-cost tariffs eight weeks ago. Prior to that sales of 3 were lethargic at best with the network only signing up around 25000 customers by the third week of May.

3s initial positioning as a high-end product failed to catch the publics imagination and it has only been since tariff prices were dropped and extremely generous tariff bundles were introduced that the demand has risen.

And in recent weeks the network has become a victim of its own success with its most popular handset the NEC 606 ending its production run while demand was at its peak.

But the handset shortages are set to be resolved the range of handsets is set to improve and grow and the network coverage is improving on a weekly basis – according to the results the UK network now covers 70 per cent of the country.

3 UK director of corporate communications Ray Bashford said: They are very positive figures given how the network was performing in May.

Since then the growth has been phenomenal and I would argue unparalleled in the UK telecoms industry.

Forty-two per cent of 1013 respondents to a poll conducted in July by ICM Research said they would first ask a family member friend or colleague for advice or help with their mobile phone.

Mobile phone stores came second with 28 per cent. Eleven per cent said they would consider calling a telephone helpline. Fifteen per cent would search the Internet for help.

Of those that would go to a mobile phone store for advice 27 per cent would visit The Carphone Warehouse.

Orange wont be pleased to read that despite its Learn campaign respondents preferred to go to Vodafone and The Link. T-Mobile Phones 4U and independent retailers came last with only five per cent of respondents mentioning them as stores to go to for advice.

The survey also showed that 47 per cent of Orange and Vodafone customers were more likely to go to their own network stores for advice.

However 34 per cent of T-Mobile customers surveyed claimed they would rather go to the Carphone Warehouse for advice than a T-Mobile store (22 per cent).

O2 fared slightly better. Twenty eight per cent of its customers would go to an O2 store but 30 per cent of O2 customers named The Carphone Warehouse as their preferred store for advice.

Text messaging came top of the services and features that most people wanted to learn more about.

The survey showed that people wanted to learn more about subjects such as roaming (41 per cent) voicemail (36 per cent) and hands-free accessories (30 per cent).

Internet access was the least mentioned subject (14 per cent) followed closely by video calls (15 per cent) and picture messaging (22 per cent).

People aged 18-24 were more likely to be interested in picture messaging games ringtones and roaming.

Respondents aged 55 and over showed most interest in roaming text messages and in-car hands-free usage.

T-Mobiles Q2 customer numbers were the last to be announced. T-Mobile put on 56446 net new customers between April and June this year and now has 9.6 million customers.

However it claims its total base is now 12.5 million users if Virgins 2.8 million are included making it the second biggest UK network.

T-Mobile still has the highest ratio of pre-pay customers but only 25 per cent of its own customers are on contract.

Average revenue per subscriber grew to 20.41 in the first half of the year. A further clean up of the pre-pay customer base will take place in the second half of the year which could cause a drop in its overall figure.

When T-Mobile did this in Q1 it dropped 441000 inactive users.

Without Virgin T-Mobile is in fourth position behind third-placed Vodafone UK (12.1 million). Orange leads (13.2 million) while O2 comes second with 12.3 million.

However there was good news for Samsung which retained the number two position with an 11.5 per cent market share in June. Samsung achieved its new peak six months after Siemens achieved the number two slot with its record 12.7 per cent market share in December 2002.

Furthermore the rise of both manufacturers has failed to dent Nokias share because that of Siemens and of other manufacturers fell slightly in the last few months.

Siemens market share dropped to a disappointing 5.8 per cent in May. However Samsung had already overtaken the German manufacturer to reach number two in March.

A Siemens spokesperson told Mobile News the manufacturer was hopeful of increasing its market share with the introduction of new handsets:

Our overall sales for this year are up. The market has grown and we are selling more phones and making more profits than ever. We are seeing buoyant sales on the new SL55 which will be reflected in the figures for the following months.

Nokias rivals may be heartened by the news that its market share dropped from almost two-in-three handsets (62.8 per cent) in April to 56.7 per cent. The sales data for June shows Siemens and Sony Ericsson in third and fourth places with 6.7 per cent and 5.9 per cent market share respectively

Motorola is in sixth place with 4.3 per cent followed by Panasonic in seventh (3.7 per cent). Sagem and Sharp occupy joint eighth place (2.8 per cent).

Activ will have six regional representatives across the north of England from Derbyshire to Newcastle and operations centres in Sheffield York and Newcastle.

Activ will be run by Sebastian Brown who has worked in the telecommunications industry for over 12 years. He founded service provider Arian Communications which was sold to Dolphin Telecom earlier this year.

Although Activ Telecom is a subsidiary of Fone Logistics it will have its own brand and its own identity said Brown. The geographical separation from Fone Logistics headquarters in Cramlington will help to broaden our presence and our regional spread will allow us to be accessible to customers across the country.

Fone Logistics was established in 1996 by Ian Gillespie as a mobile phone distributor repair centre and airtime supplier to business customers. It currently employs around 200 people and has an annual turnover of some 40 million.

The Q2 figures were disappointing for Orange and Vodafone in comparison with Virgin and O2 which managed net gains of 231000 and 258000 customers in the quarter respectively (Mobile News July 28)

Despite this both Orange and Vodafone claimed that their networks had performed strongly with increases in both revenue and global customer bases.

Vodafones small Q2 increase in customers means the network drops to the number three slot in the UK with 12.1 million active customers. O2 has moved into second place with 12.3 million active customers while Orange holds the number one spot with 13.25 million customers in total.

Vodafones net gains may have been the smallest it has experienced in the UK to date but the network still has over 800000 valuable contract customers more than either Orange or O2.

However Orange claimed its contract customers were spending an average of 568 per year ( 47.33 per month) as opposed to Vodafones contract average of 533 ( 44.42 per month).

Vodafone now claims to have 420000 customers using its live! service in the UK. Data revenues in the UK increased from 14.4 to 14.7 per cent of all service revenue.

Results from T-Mobile and 3 are due later this month.

Radford and other key shareholders have 60.2 per cent of Projects equity valued by Vodafone at 155 million.

Radford will remain under contract to Vodafone to oversee the transition and integration of Project Telecom into Vodafone.

Mindful of Vodafone closing Cellular Operations its last acquisition Radford said he had been concerned about the future of Projects staff. But Vodafone said the network had not guaranteed jobs at its Newark base.

A Vodafone spokesperson said:

One wouldnt want to say there wont be any job losses. There may be some. We intend to grow Newark as a centre of excellence. It gives us direct access to our customers which is part of our strategy.

Radford told Mobile News the companys trading statement in April had been the trigger for the sale to Vodafone.

Delighted

A number of companies made offers. I didnt want to see the business die. I am delighted to have secured the future of the company.

He added: Service provision was becoming increasingly difficult. The City wants continued growth. Once you falter they treat you abominably. This affects the share price company morale and the way you are regarded by suppliers and customers.

Service provision has had its day. There were very difficult market conditions in first quarter of this year. It became obvious that the networks wanted direct routes to customers. We were becoming unable to compete for new business and we were finding it harder to retain customers.

You can either sit and die a slow death or take the business forward. I am thrilled we could do a deal with Vodafone. It has recognised our skills and intends to expand on them.

We have seen consolidation in service provision. Service providers are becoming increasingly marginalised making it difficult to compete unless they have enormous size and ability to negotiate.

Service provision will disappear. Vodafone will only support channels that add value to its proposition in mobile data and specific customer niches.

Keith Curran who heads independent service provider Yes Telecom commented:

I am shocked by the news. Project was the benchmark for service providers. I didnt think Project needed to sell up. If it had kept its fundamental strategy it could have turned things around. Maybe the recent profit warnings and subsequent sale indicated all was not well.

The fact that Vodafone is buying another service provider is an important message we all need to take on board. However I am confident our business model still works well.

Control

Avenir Telecom MD Ishai Novick said he was not surprised at the news however and agreed service providers days are numbered:

The networks want to control their customers. It is becoming more difficult for service providers to finance customer acquisition because they are losing support from the networks.

Service providers have provided an alternative route for connections but that route is fast diminishing. We used to connect through Cellular Operations but connections have slowed down. Service providers started out to perform a regulatory function. Since Oftel removed the obligation for networks to use service providers it doesnt make economic sense for networks to continue supporting them.

The events will be hosted by Aleks Krotoski the female star of Channel 4s Bits and Thumb Bandits TV shows and will give consumers a chance to play some of the worlds best mobile games.

The tour started in Glasgow on July 24 and will take in Manchester Leeds Nottingham Birmingham Newcastle and Cardiff before ending in London in late October.

The deal adds more than 1000 acts to the Shazam service. Among the artists now available are Bon Jovi Ms Dynamite taTu and Daniel Bedingfield.

The Shazam service allows users to identify songs they hear by playing them into their mobiles.

They can then buy ring tones for the songs they identify and send music clips to friends.