Staff Reporter

Richard Pullin joins from Transcomm where he was group managing director. Reporting to Inquam chief executive Tony Greaves he will be responsible for the development of strategic initiatives.

He was previously at AT&T and also spent 16 years at the Digital Equipment Corporation.

The study confirmed that the growth in household penetration of mobile phones witnessed in previous years has slowed down with 71 per cent of UK households currently owning mobile phones.

The proportion of mobile-owning households with multiple phones increased significantly from 64 per cent in 2002 to 70 per cent in 2003 however. Most new mobile phone users continue to prefer pre-pay (75 per cent) to contract (25 per cent).

We are seeing the mobile phone market maturing rather than building putting providers in a position where finding new customers for the industry is increasingly difficult said Gunda Lapski director of European telecommunications and utilities services at J.D. Power.

There has been a significant increase in the proportion of owners of WAP phones but there is still a great deal of confusion about the technology. Many are still not using the facilities that WAP offers. Among those with WAP phones with specific features only 26 per cent claimed to use them. Only 16 per cent of users send and receive e-mails and four per cent shop via WAP sites.

However the Mobile Data Association says WAP usage is increasing (see story this page).

The J.D. Power survey found Orange Vodafone O2 and T-Mobile have all successfully improved their brand image.

O2 improved its image among pre-pay mobile phone customers by 16 index points Vodafone by 14 points Orange by 13 points and T-Mobile by seven points.

The contract phone segment also improved increasing from 100 index points in 2002 to 105 points in 2003.

Orange ranked highest in this segment.

With a nine-point increase over 2002 O2 made the greatest improvement in the contract phone segment.

The survey indicated overall customer satisfaction in the pre-pay market has significantly improved increasing from 100 index points in 2002 to 107 in 2003. Vodafone had the highest satisfaction rating in pre-pay increasing its score by eight points – the largest increase among pre-pay providers.

Orange was ranked as the top network for contract customer satisfaction according to 2111 interviews held with a cross-section of the UK mobile market between February and March 2003.

The survey examined nearly 40 different areas used in evaluating overall customer satisfaction. Contract customers said the most important factors were call quality/coverage and customer service; image; offers and promotions; cost of service; handsets; and billing.

Sherwood commented: "I´ve spent a happy 13 years at Vodafone as the business development director doing mergers and acquisitions. I felt that it was my time to go."
His role has come to an end and although Vodafone will continue to make acquisitions these will be in different areas. "I am now looking to pursue other opportunities in the mobile market" he said.
Sherwood who has seen many changes in the company over the past decade remained confident in its future.
"Vodafone has always had a focus on the customer and it has driven that through" he said.
"It was always concerned not just with putting the numbers on but about retention and looking after them."
Anglia Telecoms CEO Andy Smith paid tribute to Sherwood´s time at Vodafone.
"Tim has made massive contributions to Vodafone including some major acquisitions" he said. "He has been a key player in the growth of the business."
Sherwood who has already left Vodafone plans to take a couple of months holiday before examining other job opportunities.

The deal will not be completed until the autumn when the handset design and production division of Palm will be split away and merged with Handspring to create a new firm.

Palm shareholders will own 67.8 per cent of the new company while Handspring shareholders will own the rest.

Palm chief executive Eric Benhamou said:

These two bold moves will serve as a powerful catalyst to transform the landscape of the handheld industry.

The strategic choice of merging Handspring and the Palm Solutions Group of Palm will create the broadest portfolio and the most experienced leadership team in the industry fully capable of delivering value to customers partners and shareholders.

According to Palm the merger will offer both companies greater revenue opportunities and will provide operating savings of approximately $25 million a year. Around 125 people will lose their jobs as a result of the merger predominantly in the US.

The merger of the two companies marks a full circle for Handspring which was set up by Palm founders Jeff Hawkins and Donna Dubinsky. They left Palm when it was acquired by 3Com and set up Handspring.

The row relates to the circuit-board design. The SPV is built by Taiwanese manufacturer HTC but proceedings are against Orange because Sendos patent is registered in the UK and Orange is the importer.

Sendo is also in a legal battle with Oranges SPV partner Microsoft in the US. It alleges Microsoft used knowledge gained during its one-time alliance with Sendo to develop the Orange product.

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

Sendo claims that Microsoft took the information it gained during the development of the Z100 and passed it on to Taiwanese company HTC which later developed the Orange SPV in partnership with Microsoft.

Significantly the Z100 never made it to market.

Sendo has created intellectual property rights within the smartphone and mobile phone arena said Sendo chief executive Hugh Brogan.

We have been advised by our patent agents that the Orange SPV phone infringes these rights. We have tried to solve the matter in an amicable way. However we are now in a position that we have to take legal steps. We are seeking damages and an injunction to restrain sales of the product

If Sendo believes that its global intellectual property rights are infringed wherever in the world this might be we will take steps to defend those rights.

Orange said it strongly denies any impropriety regarding the intellectual property rights of the SPV and has contacted the parties involved in the design and build of the handset.

For legal reasons we cannot comment any further the network said.

Sendo is still waiting for the first hearing to decide whether its case against Microsoft will be heard in Texas or in Microsofts home city of Seattle.

The announcement came the day after Motorola issued a profits warning saying that the Sars epidemic had hit sales in China its most important market.

Nokia confirmed that its second quarter profit forecast of e0.13-e0.16 earnings per share was accurate.

Nokia said that sales growth is expected to be positive but at the low end or below the guided range of four to 12 per cent year-on-year.

Nokias market share for the second quarter is estimated to be higher than in the first quarter of 2003.

Motorola chief executive Mike Zafirovski had forecast Asian sales to be down by at least 20 per cent for the second quarter.

The service developed by ATM network LINK is expected to roll out to other LINK member cash machines shortly. It had been soft-launched for a week at The Co-op Bank before officially launching last Monday.

Sheila Macdonald The Co-op Banks executive director and chief operating officer said:

This is a convenient service that we think will prove popular with mobile users because it does away with pre-paid vouchers. Our customers can go to any Co-operative Bank cash machine in the high street or to a Co-op convenience store to top up.

The bank receives a commission from the networks for each pre-pay top-up made by its customers. When a Co-op Bank customer inserts their debit card at the cash machine an extra mobile phone top-up menu appears in the list of options.

The customer enters their pre-pay mobile phone number and selects a top-up amount between 5 and 25 in increments of 5.

LINK says a couple more banks will be ready to launch within a couple of months but adds that some of the bigger banks wont be ready until the end of the year. It says it is in discussions with Virgin Mobile and other MVNOs to secure mobile top-ups for their customers too.

LINK head of corporate relations Scott Housley told Mobile News:

Our objective is to offer mobile top-ups in any cash machine for any bank. There are more than 43500 cash machines in the UK. It remains to be seen if some of the smaller building societies will carry out the development to make this happen.

In court T-Mobile lawyer John Swift QC described the cuts as a straitjacket and said they were illegitimate and unlawful. Vodafone argued that the regular took an irrational and unreasonable approach in deciding what was fair.

In January this year Oftel ordered far-reaching cuts in call charges after a report by independent review body The Competition Commission. The cuts will leave operators losing 2 billion in revenue over the next four years.

The networks immediately damned the decision and appealed for the matter to be taken before a judicial review.

They also immediately introduced a 40 cut in commission payments to dealers while O2 said the ruling would delay the roll-out of its 3G network.

Vodafone T-Mobile and Orange all then took out separate but connected judicial review challenges to the Oftel decision.

Earlier this year 3 had asked its shareholders of which KPN is one for an extra 1 billion of funds to help the roll-out of the new network.

Hutchison Whampoa and NTT DoCoMo provided 650 million and 200 million respectively – in proportion to their 65 per cent and 20 per cent stakes in 3 UK.

But KPN which last year wrote off the value of its stake in 3 UK and offered it for sale refused to provide its share because it said the agreement under which it owned a 15 per cent share did not require it to lend the money.

In the end Hutchison covered the shortfall increasing the size of its contribution to 800 million.

We have instituted legal proceedings in London against KPN for breach of contract and to claim damages for that breach a Hutchison spokeswoman said.

The claim was made in the second court case around T-Mobiles ongoing dispute with Virgin Mobile (Mobile News June 2).

T-Mobile had attempted to reduce payments to Virgin Mobile by disconnecting Virgin Mobile customers who hadnt made a call or sent a text for 180 days. This was last month dismissed as unreasonable and unjustifiable by the High Court.

The joint-partners of the T-Mobile/Virgin Mobile venture who were in court earlier this year over T-Mobiles attempted termination of the joint-venture returned to court last month as T-Mobile sought to terminate users it said hadnt made a chargeable event.

T-Mobile had served a 28-day notice on Virgin Mobile to comply with the disconnection notice. It was only when an injunction was threatened by Virgin Mobile that T-Mobile agreed to wait until the matter had been decided by the courts.

A ruling earlier this year by Justice Cooke said that T-Mobile had the right to reasonably vary the disconnection terms of Virgin Mobile customers. The question was whether its chargeable event criteria were reasonable.

The judge stated that if a Virgin Mobile customer hadnt made or received a voice call or a text message in 180 days termination could be carried out.

T-Mobile argued that merely not making a call or sending a text for 180 days (a chargeable event) was enough to warrant termination of a customers account.

In the previous hearing Justice Cooke had ruled that if records of inbound usage were retrievable then disconnection of a customer who had received a call within 180 days would not be reasonable.

T-Mobile produced evidence that showed that its computer system was not designed to produce information about inbound calls to T-Mobile or Virgin Mobile customers.

Under questioning however T-Mobile admitted that data about incoming calls could be found within the system and could be collated and analysed.

However it argued that the system would have to be reconfigured to produce such information and the network claimed such reconfiguration would take eight weeks.

Virgin Mobile argued that this procedure should take no more than four to five weeks.

The judge decided that because of prior work on the system T-Mobile could indeed have had such configuration carried out from July 2001 when the disagreement initially arose.

Justice Cooke further ruled that not only did T-Mobile have a record of Virgin Mobile customers inbound use but the information was indeed retrievable from the records held without undue or disproportionate effort.

As a result just because the T-Mobile system had been set up in a certain way it was not justifiable for the network to issue the disconnection directive.

The court heard how since October 2001 T-Mobile for Oftel reporting purposes was assessing its own customer base by reference to outbound and inbound activity. Furthermore two examples were given where T-Mobile used its records to show incoming calls for customers.

This led the judge to reason: For practical purposes there would be no real difficulty in T-Mobile identifying whether or not a Virgin Mobile customer who had been inactive on an outbound basis had received either a phone call or a text message during that same period.