Staff Reporter

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.

Two new entry-level voice tariffs are introduced and handset prices drop from 200 to free on the new VideoTalk 750 tariff as well as on the established Kit on 3 and Caboodle on 3 plans.

Both new plans VideoTalk 500 and Video Talk 750 offer three times as many inclusive minutes as any other UK network.

VideoTalk 500 ( 25 a month) offers 500 minutes of calls to landlines and cross-network mobiles as well as 25 text messages.

VideoTalk 750 ( 35 a month) gives 750 minutes of inclusive calls and 50 text messages for 35 a month. Until September 3 3 is also offering 10 and 20 of free video services on each tariff.

This can be used for video calls and video downloads. The new tariffs slot in below 3s existing Kit on 3 and Caboodle on 3 tariffs ( 59.99 and 99.99 a month respectively).

The move coincides with an expansion of 3s network nationwide and an increased retail presence of 2000 outlets nationwide.

New chief operating officer Gareth Jones denied the new tariffs had been rushed out to boost slow sales.

The 2G networks have over-priced voice calls because they cant offer anything else. People dont realise that the benefit of running a 3G network is that we can afford to offer better-value voice calls than the GSM networks.

This is down to the network capacity that we have and the nature of the technology. We are the only operator that can offer the benefits of 3G and good-value voice calls. We want to show people that we are not just a one-trick pony said Jones.

Until now we have addressed a narrow market. We are now offering the service at the broad end of the market with the appeal of good-value voice. This will accelerate customer growth on the network.

Theres nothing sophisticated about the new tariffs. We can afford to offer these new tariffs within the business plan.

We havent come up with this tariff overnight. Plans were in place before I arrived. We have just executed them.

Jones promised 3 will be more aggressive in the coming months.

You will see a far punchier approach at the point of sale and a more confident upbeat message through the advertising he said.

Meanwhile Orange has announced it will not be applying its Orange Value Promise to the new tariffs offered by 3.

Ironically Jones was one of the architects of the OVP when he was distribution and sales boss at Orange.

The closest equivalents on Orange are the 400 minutes option at 50 and 700 minutes option at 70 – both twice the price of the new 3 services.

A spokeswoman for Orange explained the networks logic:

Orange does not offer the Orange Value Promise on 3s tariffs as we do not yet offer all the services available on 3.

Orange Value Promise matches the most popular tariffs offered by other mobile networks in order to give customers the greatest choice of tariff while retaining all the benefits of being an Orange customer. Once we have launched services that are unique to 3G we will of course review this.

In another 3 development the third-generation handsets are now also available online through mobileshop.com the online retailer which has also become a T-Mobile direct dealer.

We went through a stringent grading criteria to become a 3 dealer and we aim to become one of its direct partners said mobileshop.com managing director Ian McCall.

This is not a threat to our existing sales channels. We see this as an opportunity to get more momentum in the market said O2 sales director Mark Stansfeld.

This deal fits nicely with our balanced distribution strategy. This is all about supplying products and services through Tesco stores. This is incremental business for us and takes no focus away from our own propositions. It is a bold move for O2. I dont think anyone would have thought O2 would enter something like this a year or two ago said Stansfeld.

It is clear that the majority of new customers are not new but are going to be cannibalised from all four networks.

We hope this cannibalisation will be limited as far as our own customers are concerned. We are also hoping there will be a net gain in new subscribers from Tesco customers who may not currently have a mobile phone.

The new MVNO will sell Tesco branded mobile phone services in time for Christmas with plans to sell contract phones next year throughout the retailers chain of stores. The company is aiming for two million customers in the next five years.

Tesco chief executive Sir Terry Leahy has promised Tesco customers handsets in store and over the Internet with charges that will be simple and clear.

O2 is a good partner for Tesco. Customers like our new retail services. They are keen for us to enter the Telecoms market he added.

MmO2 chief executive Peter Erskine said the new deal would allow O2 to increase its customer base.

Our joint venture with Tesco gives us an ideal way of reaching important new customer segments with great mobile services he said.

Under the terms of the deal Tesco Mobile is exclusively tied to sourcing its mobile products and services from O2.

At a meeting last Wednesday near Heathrow some of the countrys leading freight forwarders and phone traders learned of a central database that may one day soon link freight forwarders and traders in the UK and abroad enabling them to scan and record IMEIs as phones enter and leave the country.

The result would be a means of tracking mobile phone movement and supply chain information in out and around the UK accessible by traders and forwarders via the Internet.

Mfreight is a joint venture between freight inspectors A1 Inspection Ltd and software company Recipero.

The idea is that subscribers to the system will be able to look at the whole of a given supply chain to determine the individual history of a particular consignment of phones (see full story P16).

Marks has bought the company which she sold two years ago as well as the other companies within the Stanhope Communications group. These include a fixed-line and call-centre business. After selling Bedfordshire-based Aerofone Marks became group managing director of Stanhope and oversaw the merging of its interests to create a company that provided mobile and fixed-line services.

She now becomes chairman of the group of companies she has purchased.

Our vision is to exploit the changes in the marketplace and what we see as an inevitable convergence of call charges for mobile and fixed-line services she said.

We have extensively resourced our information technology so that businesses can get one analysed and itemised bill produced electronically giving them better management of all their telecom requirements.

Marks went on to say that telecoms had been an extremely tough business over the past couple of years. It is critical for us to address costs every month to ensure we are able to offer the best value to our customers.

Aerofone has won two Best Service Provider Mobile News Awards.

The CarphoneWarehouse is likely to acquire another service provider said director of indirect distribution Steve Fraser.

The Carphone Warehouse will expand its Mobile Phone Express brand delivering SIM-free and other propositions such as its fixed-line service TalkTalk to independent dealers. It will also expand as a supplier to non-specialists including petrol stations high street grocery stores and supermarkets.

Airtime provision will likely occur through the purchase of another distributor.

We had conversations with Unique and we couldnt get anywhere said Fraser. Weve had other conversations with other parties. Were talking to everybody.

He conceded that this might take some time however. If the right one came at the right price that would be the best way. If we acquire a business tomorrow that would be great but it could take four months.

The Unique saga showed you need to be well-funded in this business he added.

People say that its hard in distribution and that to be successful you have to buy at the right price. If you can then theres a great market. But its tough if you dont have the funding and the ability to buy at the right price. Thats whats driving consolidation of the market rather than where customers choose to buy.

If Unique had a bank full of cash it would still be operating he said.

He also predicted that market consolidation would leave Carphone Warehouse in a strong position.

There are probably going to be three big players – the Caudwell Group Data Select and I suspect ourselves.

The business of distribution will revolve around big well-funded operations he added.

Its fairly unusual in a market to find one large distributor and some smaller ones. Usually there are two or three very large ones and then some niche players. Perhaps its about now that this consolidation will take place.

Full interview page 18

As its 3G offering the Korean manufacturer has created the Z105 a clamshell phone with a built-in rotating digital camera colour screen 40 polyphonic ringtones videophone and video streaming. It will be available in May.

It has also launched its first megapixel camera phone. The P730s integrated camera function offers seven different still-image sizes and a digital zoom feature. A twist-and-flip design allows users to take photographs when the handset is opened vertically and also when the LCD is rotated to a horizontal position. For moving images there are separate controls for pause brightness and detailed zooming and up to 100 minutes continuous recording time.

Samsung is hoping to repeat the success of the E700 its hugely popular clamshell camera phone with the E800 and E810.

However the manufacturer is moving away from the clamshell in favour of a slide-up design.

Ender Yavas head of product management for UK wireless said: The E800 features a 65K colour screen built-in VGA camera wide screen 64 polyphonic ringtones and several user-friendly features like photo Caller Line Identification- we believe it will be the phone to have this Christmas.

It also features a 180-degree rotating lens and a small mirror for self-portrait pictures.

The D410 is another slide-up handset. One touch of the phones screen display reveals the keypad power buttons and other features.

It includes a VGA camera wide screen 64 polyphonic ringtones and several specialised business functions allowing users to check e-mails share and exchange vCard and vCalender functions and information through an IrDA port and record reminders using Voice Memo.

However Samsung has not overlooked the popularity of clamshell designs.

The Samsung P510 is a clamshell camera phone that opens and closes with one touch.

The P510 has a digital VGA camera that includes a three- five- and 10-second timer option which allows users to take six nine or 15 consecutive shots in high-speed or normal mode. The phones multi-shot feature lets users choose the best image to keep or save them all for a stop-motion effect.

A new addition to Samsongs fashion range is the X450 clamshell. The handset weighs just 79 grams and includes a 65K colour screen. It includes 40 polyphonic ringtones a personal organiser four embedded Java games MMS and storage for up to 1000 phone numbers.

The i700 is built around Microsofts Pocket PC Phone Edition and includes Pocket Office for Business Needs. It features Windows Multi-Player for multimedia file playback and MSN Messenger.

Other offerings included the i500 camera phone with Palm OS 5.2 enabling users to continuously connect to the Internet and the D710 slide-up mobile based on Symbian operating systems with a built megapixel camera.

Commenting on the appointing easyMobile CEO Frank Rasmussen said: Sandy has exactly the right profile for the job. He is very experienced and has extensive knowledge of the UK market.

He will be responsible for all the marketing responsibilities in the UK.

EasyMobile is expected to embark on a high-profile national advertising campaign.

It launched the first stage of its ad campaign this month on tubes trams and buses in London Manchester and Birmingham.

Industry consensus is that easyMobile has so far failed to live up to its launch hype.

A London Underground spokesman told Mobile News that more than 60 organisations have formally expressed interest which was way above the number that LU expected to receive.

The closing date was the end of April but due to the continued high level of response LU has decided to extend the deadline to 23 May.

In March Mayor Ken Livingstone announced that London Underground was interested in looking at the possible introduction of mobile phone services.

These would cover new technology services such as DAB digital radio DVB digital video broadcasting and wireless Internet on the Tube.

Income generated for London Underground by this venture would be reinvested in the Tube network to fund further improvements for passengers.

London Underground does not currently intend to provide coverage on Tube trains underground but if feasible mobile phone services and the additional technologies could be extended across the network to include tunnels and moving trains at a later date.