Staff Reporter

Thats the view of Keith Curran general manager of Yes Telecom which also runs its own MVNO utilising the T-Mobile network.

The pie is already baked and it cant get any bigger. Now somebody else wants to take a knife to it he said.

Of course the competition will be great news for consumers but ultimately it will undermine all the networks because the vast majority of their customers spend between 20 and 30 he added.

He said the existing pre-pay base on every network would be affected.

In general terms it wont affect business customers or those spending over a certain amount of money but it will be a major issue for the pre-pay sector as that represents such high volumes for the networks – sometimes as much as two-thirds.

Curran claimed that the easyMobile premise cut out the entire distribution channel and so threatened small dealers livelihoods.

The end user will feel like hes on to a winner but the industry as a whole is on to a loser said Curran

See full story page 24

A statement from his solicitor Ahmet Ratip of Imran Khan & Partners said: Mr Khan strenuously denies all accusations and the case will be vigorously fought to show his innocence.

Khan has been charged with threatening to kill threatening criminal damage two counts of arson and one count of arson with the intent to endanger life.

Anton Davies of Just Communications said he had no choice but to complain to Ofcom. Only then did Genesis bother to get in contact with him.

It normally takes five days to get a PAC code but the whole process has taken more than three months with Genesis and would have taken even longer without Ofcoms intervention he said.

Genesis is not a member of an Alternate Dispute Resolutions (ADR) agreement and has now been warned if it does not join it will face enforcement from Ofcom.

The Communications Act 2003 requires every public communications provider to provide access to a dispute procedure scheme for their domestic and small business customers.

Ofcom has approved two schemes: OTELO and CISAS. Genesis is not a member of either. If it fails to join such a scheme Ofcom will take action.

Genesis marketing director Brad Whatmough said:

The customer signed a contract which clearly stated 90 days notice. We have not breached any terms of our agreement with them. But this situation took too long to resolve.

Whatmough added that Genesis had recently changed the cancellation notice period from 90 days to 30 days.

We realise our previous way of doing things is outdated he acknowledged.

Genesis is in the process of finalising an ADR agreement within eight weeks.

Haier ranks fifth among Chinese manufacturers in its domestic market behind Bird TCL Amoi and Konka.

Its factory headquarters in Qingdao cost 25 million and can churn out 15 million handsets a year.

Theres the possibility of working with Tesco Mobile or BT Mobile or other small MVNOs that want to differentiate themselves said Haier sales and marketing head Tim Sagar.

Its a question of building confidence. People are very snooty but once we have a reference with an operator our reputation will build he said.

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Networks have reacted angrily to a report by consumer watchdog Which? magazine that urges consumers not to bother buying a 3G handset this Christmas.

Which? claims that limited 3G network coverage means there are likely to be problems accessing 3G services successfully the service has bulky handsets and consumers are better off with a 2G phone.

Malcolm Coles editor of Which? commented:

There are teething problems with 3G and coverage. We recommend sticking with a 2G phone for the time being. Well be keeping an eye on 3G phones to see if they and the networks live up to their hype.

A 3 spokeswoman said she was surprised by the findings as they reflected little understanding of the UKs 3G market.

She added: Contrary to the Which? report 80 per cent of the British public can access our video mobile services while 99 per cent can access our voice services.

Which? is also mistaken on the issue of handsets. At 114g our NEC 338 is actually lighter than one of Which?s best buys and it has video calling e-mail and full-length music videos.

A Vodafone spokesman said the Which? claims had resulted in some misleading conclusions.

We would be very interested to know the handset models Which? was reviewing in order for it to state that they are bulky he said.

We can only conclude that it was reviewing early models and its report is based on research conducted before the Vodafone 3G launch. Our initial 3G handsets are comparable in size and weight to many of our existing 2.5G models.

The Vodafone spokesman went on to claim that the reports comments on current levels of coverage seemed to have been misconstrued by many reading the report.

Our customers can pass from 3G to GSM/GPRS coverage seamlessly he claimed. The only services which wont hand over are video calls and video streaming. We are confident that our 3G service offers excellent value and an extension of the services we are offering over GSM.

A spokesman for Orange said:

Which? makes some very valid points in the report but unfortunately the market has caught up with it since it looked at 3G.

Lots of the points made complete sense. But what Which? has said isnt rocket science. You have to make sure the customer has the right phone. Orange has 99 per cent population coverage of which 70 per cent is 3G but its an integrated network. Customers move seamlessly from one to the other.

T-Mobile avoided commenting directly on the Which? report merely stating:

3G is an important technology platform for offering advanced services for customers. It is an important part of the simple seamless technology strategy of T-Mobile including GPRS and W-LAN.

Despite the network furore Which? stood by its findings saying:

The networks may say that 3G handsets switch seamlessly from 3G to GPRS. But the point in buying a 3G handset is access to enhanced services such as video calling. Consumers wont get that unless they are within 3G coverage areas and there are tracts with no coverage at all. For example in Wales there is virtually no 3G coverage.

We appreciate that more 3G phones have launched since we did our research. At that time only the Nokia 7600 LG u8110 and Sony Ericsson Z1010 were available for testing. We had to work with what was out there.

We know more handsets have since been launched but we will do an update next summer and if as the networks claim things are much improved Im sure our next report will reflect this.

See Our Shout page 16

It is almost a year to the day that new regulations came into force making it a specific offence to use a hand-held phone or similar device when driving.

The penalty for failing to comply with the new legislation is currently a 30 fixed penalty but drivers also face the risk of prosecution with a fine of up to 1000 on conviction in court.

At first the legislation was great news for the industry particularly for dealers distributors and accessory companies as sales of car kits Bluetooth headsets and hands-free kits surged.

But the mood was quickly punctured when it became clear that these penalties werent actually being enforced; few people received fines and even fewer were prosecuted.

Now 12 months on the Department of Transport is pushing for harder penalties. It wants offenders to be punished with three points on their licence and the fine doubled to a more off-putting 60.

But a spokeswoman for the Department of Transport admitted to Mobile News that it could be a while before the new penalties become the letter of the law.

To be able to say how long it can take a bill to be passed through is like saying how long is a piece of string she said. Obviously from our point of view the sooner this comes into force the better.

As the bill for achieving this formed part of the Queens speech to Parliament the spokeswoman said the legislation could be all finalised by early 2005 but she added that the industry would have to wait and see.

Seldon Scott managing director of Selfones developed the Selfones HF2 handsfree car kit in response to the 2003 legislation but he admitted that after initially healthy sales things quickly slowed down.

The new penalties will no doubt generate business but it will all depend on how the Government promotes them. If it goes for a huge national advertising campaign we will all see the impact through retail.

He added: Last year the legislation prompted a huge rush of sales before Christmas but that soon died in the new year especially as it soon become apparent that the police werent interested in enforcing it.

Adrian Foot managing director of Phone Accessories Direct thinks that the new tougher legislation will force drivers to act and as such he is looking forward to the prospect of increased revenue.

I think the past year has acted as a cooling off period – people know they shouldnt do it but theyve carried on regardless because it has not been enforced up to now he said.

But once you start talking points and people realise they could actually lose their licence we will see a real change in attitude and people will rush to buy compliant kit.

Foot predicts a real surge in sales when that happens particularly around Bluetooth headsets. That will be great for our business because well be only to happy to supply that demand he said.

But Ian Robinson managing director of Kent-based MoCo Distribution believes the Government will have to ensure it acts to clear up confusion as to which kit is actually legally compliant.

When the legislation first came out things were a mess because there was so much confusion about what kit was legal. This time round the Government needs to make it crystal clear what is and isnt allowed regarding mobile phone use in the car.

Robinson even went so far as to suggest the government should endorse a product.

The prospect of three points on a licence will really shake things up and I expect people will take it seriously and want to be legally compliant.

But the Government needs to get off the fence and endorse a product that is legally compliant. That way people will know for sure what kind of kit they should buy.

Even so Oranges direct sales team is said to be matching 3 tariffs if customers threaten to churn to the 3G network.

Gary Bridger proprietor of Airwaves Communications told Mobile News:

Orange is matching 3 now on its Orange Value Promise. If a customer wants to leave and requests their PAC code Orange will match 3 tariffs to retain them. Trying to get a customers PAC code from Orange is becoming very difficult.

An Orange spokesman explained the omission of 3 and Virgin Mobile in the ad campaign saying:

Its a Value Promise not a price promise. What you subscribe to on Orange and what you subscribe to on 3 are different. If you compare 3s offering with Orange they are slightly different propositions.

The new MVNO offering is launched to business customers only. BT will be responsible for all marketing branding billing and customer service while network airtime and services will be provided by Vodafone.

BT Mobiles portfolio of services will become available to consumers in January.

Steven Evans CEO of BT Mobile said that the MVNO which uses airtime from Vodafone would target customers through large high-street retailers but would resist cheap packages and large dealer commissions.

We are not going to buy market share at any cost said Evans.

We are going to use the high street retailers. We have proven already that we can add customers.

He added: We will look at the value of customers and at the ARPU and we will offer commissions depending on the sale. Ultimately we will define ourselves by the convergence of fixed and mobile.

The significance of today is the launch of BT Mobile on the Vodafone network as an MVNO. Until now we have been acting as a service provider to O2. From today onwards all new customers signing to us will be on the Vodafone network.

An MVNO has a lot more flexibility to differentiate services. A service provider effectively just re-badges a networks services.

Evans reckons that as an MVNO BT Mobile is in now charge of the services that it puts on the table. New service Business Circle lets businesses manage their telecoms costs through a mobile Virtual Private Network (VPN) which links mobile devices to company switchboards and enables calls to company mobiles across the private network to be charged at reduced prices.

BT Mobile customers can also manage conference calls via a mobile handset with new service Confer-ence on Demand and is about to offer business customers BT Openzone Wireless Broadband for a reduced monthly fee.

Evans added: We will be maintaining our existing service provider base on O2 until they reach the end of their contracts and then look to sign them to the new Vodafone MVNO arrangement. We have a whole raft of customers who are between month one and month 24 of their contract so they are becoming available to re-sign all the time.

BT Mobile put on 90000 new contract customers between June and September 2004 bringing its total customer base to 305000. Of the total 145000 are business customers.

As customer contracts expire over the next two years BT Mobile will attempt to re-sign them.

In the six months to September 30 turnover from mobility services nearly trebled compared with last year to 49 million.

SUBtv claims an audience of 1.2 million student viewers. The campaign features 3s Japanese style

critter characters in sequences designed to promote 3s messages of we like music and we like sharing.

The videos will appear on plasma screens installed in student unions across the country.

The campaign will run daily in 30-minute lunchtime and evening sessions for 10 weeks

Students will be able to text the screens so that their message will appear on the local tickertape.

Group Telecom was set up by Ian and Andrew Bailey. It ceased trading last month and its final accounts showed it lost 409942 between August 2002 and November this year.

In a report on the companys trading history a director said:

The growth of the business was also hampered by restrictions and lack of support from Nokia for whom (Group Telecom) had only one manufacturers accreditation. This severely limited the size of the contracts the company was able to tender for and was therefore only able to tender for low-volume low-margin retail sales.

The directors report also acknowledges an increase in competition from Far East repair centres which were able to offer lower cost repairs.

Also blamed was a legal row with a third director Angus Davidson who sued the company for unfair dismissal.

This diverted a substantial amount of the directors time from focusing on the business to defending the action added the report. A substantial cost was also incurred in defending this action.

Among the creditors are Customs and Excise ( 70000) Inland

Revenue ( 32000) Unique Distribution ( 3700) and Intec ( 1316).