The investors are believed to be businessmen Alan Hemmings and Keith Hughes. Hemmings reportedly owns a motorcycle retailing operation called Motorocycle City while Hughes is said to be involved in the container business.

Joint managing director Amjad Baig confirmed that a deal was close to being announced. But he declined to make any further comment due to the sensitive nature of negotiations and confidentiality agreements.

Industry sources indicate that around 25 per cent of The Phone People might be up for sale for around 5 million. Baig said this amount was not necessarily correct adding that he would be taking legal action against Mobile News should we report incorrect figures.

In April Baigs business (Cont P2) partner Jason Pickthall told Mobile News Phone People was in potential takeover talks with the networks with One 2 One tipped as the hot favourite to buy the 125 stores

But One 2 One sales director John Barton said last week:

One 2 One has no interest in The Phone People and will not be acquiring any equity.

Pickthalls preference was for an investor to take a stake in the company.

Pickthall admitted then that The Phone People had encountered difficulties from its rapid growth but he denied the company was in crisis.

In April he told Mobile News:

We have our problems but we are not only beginning to see light at the end of the tunnel but we are starting to come through the tunnel.

Over the past 12 months the company has been run in too much of a lackadaisical way. You can perhaps get away with doing things that way if you have 30 or 40 stores. When you have 125 stores you need to perform.

Mobile News understands Baig and Pickthall will continue to run the company in the event of any partial sale to outside investors.

Peter Bamford remains chief executive of Vodafone UK. Reporting to him will be David Jones Ian Gray Paul Donovan Mike Pinches and Andy Halford.

Jones moves from running Vodafone Connect to Managing Director (Sales & Distribution). He will co-ordinate sales strategy across all UK markets including retail indirect sales including dealers and multiple distribution.

Vodafone Retail MD Ian Gray is managing director Customer Operations responsible for all customer care teams and call centre operations including Credit Management Billing and IT related activities.

Commercial director Paul Donovan becomes managing director Commercial with accountability for all marketing activities product and service-focussed groups including a new multi-media business unit and handset purchasing and logistics activities.

Vodafone technical director Mike Pinches who has been with Vodafone since 1985 is now managing director Networks responsible for all network operations including data and paging and technology strategy and development.

Vodafone UK managing director Alan Harper is now group strategy director.

Reporting to David Jones will be Ken McGeorge who is now MD of Indirect Sales.

Brand marketing director Helen Keayes becomes acquisitions marketing director reporting to Paul Donovan.

Said Bamford:

This is a substantial change to the way we operate. Our new structure will achieve a much greater integration of activities and concentration of our skills.

It allows us to refocus our resources on the key priorities of the future as we seek to realise the tremendous business potential presented to us as we move into the internet and multi-media age.

The PocketPhone Shop will eventually be run by Chris Edmeades ex-retail director of Phones4U and the man credited with creating the Phones4U brand.

Edmeades has already worked closely with One2One sales director John Barton when the latter was sales boss at Phones4U.

The original PocketPhone Shop management team of Simon Jordan John Davies Mark Hodgson Martin Cox and Dominic Jordan have resigned and are expected to cut all ties with The PocketPhone Shop within the month.

Jordan has reportedly made 30m from the deal. The company will continue to trade under the name The PocketPhone Shop for the foreseeable future. The investment in the 52 million turnover chain is part of Deutsche Telekoms strategy to build up its presence across Europe through the development and expansion of its operating companies.

Barton told Mobile News:

We started serious discussions with PocketPhone Shop last year. They were doing the majority of their business with Vodafone and we were network out in the cold. We started to develop a relationship with them and saw the volume of what they were doing. They started to buy more prime sites which (Cont P2) was of interest to us. Deutsche Telekom has 500 branded outlets in Germany. They didnt understand why One 2 One didnt have this part of the market.

One 2 One commercial director Richard Shearer said:

One 2 One has been inhibited in its sales by only addressing 80 per cent of the potential market through traditional distribution channels. It was clear to me that the balance was made up of sales from network-owned retail outlets either selling the single owner-brand or a combination of all the networks. One 2 Ones growth has been remarkable but there is a tremendous opportunity to close that gap.

Shearer said The PocketPhone Shop acquisition complemented its support of independent retailers who will continue to be a significant part of our distribution strategy.

This in no way detracts from our continued support of our independent retail channel who are essential to our distribution strategy said Shearer.

One 2 Ones sales director John Barton added:

Weve bought that which already exists. So it doesnt bring in more competition for our retailers. It makes more well-founded what already exists. PocketPhone Shop has been known as an aggressive retailer sometimes cutting deals which other channels have complained about.

Under One 2 Ones ownership that sort of activity will be reduced and a more approved state of affairs may result said Barton.

Paula Butler (24) was caught after computer checks uncovered her trail of dishonesty magistrate Geoffrey Breen was told at Horseferry Road Court London.

Butler of Eskdale Avenue Chesham pleaded guilty to two charges of stealing a Panasonic handset and an electronic diary both worth 649 in February and April of this year.

She further admitted theft of call vouchers other handsets and accessories worth 1300 between November last year and May when she was arrested. (Cont P2)

Prosecutor Anne Steer told the court that Butler stole the property at The Carphone Warehouses Covent Garden branch. To cover the losses she falsely recorded fake customer refunds.

Her dishonest dealings were discovered because the transactions were computerised. The discrepancies eventually came to light with her name against the dealings.

Butler admitted her guilt when interviewed by police. She said the stolen property had been given away as gifts to others.

She was remanded on bail until July 18 for pre-sentence reports.

Three white men reportedly tricked their way in to the depot. One of the night watchmen was assaulted and knocked unconscious.

The two men offered two IDs said to be of top quality. But staff became suspicious when one of the men made a mistake on the paperwork for the new phones and contracts. The men were held in the store by World of Accessories staff who called the police who arrested the crooks.

This has happened before where people are coming in using forged documents and proofs of ID said WoA director Masharaf Ali.

It is now becoming an ongoing problem and mobile phone stores are seen as an easy target. The thieves seem to be going for dealers with multiple branches. Our staff are better trained than ever and have been through the FCS training courses. We are putting in more effective procedures including stamping all proofs of ID so they cant be used again. Over recent weeks we have had several further attempts at the same kind of fraud which we have been able to foil.

Anne Sibley of the FCS Crime Prevention Scheme told Mobile News:

Weve been working closely with WoA on problems they have had and given them some fraud prevention training.

All the big retailers are suffering from it. The whole credit-issuing industry in the UK is suffering from application fraud Sibley said.

Orange has received the award for Mobile Communications Product of the Year for its WAP services at this years Networking Industry Awards. It faced competition from Hewlett-Packard Nokia and Psion

The awards are judged by an independent panel of information technology users manufacturers and journalists.

Orange says it was the first UK network to launch a WAP service.

During this time Orange signed up 1.2 million net new customers of which 212000 were on contract. This smashes Vodafones Q2 performance of just 75000 contract customers from 572000 new users. Vodafone still has the largest installed base of 9.36 million customers.

One 2 One and BTCellnet also trounced Vodafone for Q2 connections. One 2 One put on a million net new connections with 97 per cent of these on pre-pay. BTCellnet recorded 670000 net connections but did not give a pre-pay breakdown.

VodafoneAirTouch boss Chris Gent explained the relatively poor UK net connections by saying:

In the UK we have resisted involvement in a chase for customers at any cost and have adopted a prudent approach to controlling potential prepay fraud.

Orange said its Just Talk pre-pay tariff has attracted 984000 new customers since its launch last October taking the Orange pre-pay base to more than 4.4 million from a total of 7.16 million customers. The network said its overall churn fell from 14.6 per cent to 13.2 per cent for the year to 31 March. Churn on Oranges contract base improved from 20.6 per cent to a rolling annual average of 18.0 per cent. Orange pre-pay churn moved up from 8.2 per cent last time to a rolling annual average of 9.0 per cent.

Virgin Mobile One 2 Ones joint venture has grown by over 70000 in the quarter. Virgin Mobile now has a customer base in excess of 280000.

Scapegold was a Sony Cellular and Orange distributor based in Wenders Ambo Essex. It went bust in November 1998 owing creditors more than 650000.

Kobeissi even put himself down as a creditor following an unsecured loan of 50000 to Scapegold. A jury at St Albans Crown Court heard Kobeissi (24) had used company funds to pay for his high-living lifestyle.

Kobeissi persuaded bank managers creditors and friends that his business was booming when it was in fact insolvent. The company was in financial trouble from early 1998 and its debts rose to 650000 the court heard.

Kobeissi of Leaden Roding near Dunmow was the director involved in the operational side. He dipped into the company bank accounts to live beyond his means.

The jury found him guilty of fraudulent trading and 14 deception charges. He was cleared of two deception charges. Two deception charges were left on file after the jury failed to agree verdicts on these.

During sentencing the judge told him he showed a callous disregard for other people their savings and their lives.

Sony Cellular Services and Orange were each owed respectively 115000 and 76000 by Scapegold.

Despite trading fraudulently Kobeissi tried to organise a Corporate Voluntary Arrangement which would allow the company to keep trading while it worked to repay creditors 40p in the pound. The idea was that all revenue would be paid into an accountants client account which would then disburse commission payments to connecting dealers.

However creditors rejected the idea and Kobeissi resigned. In his initial statement to creditors Kobeissi admitted that Scapegold was in a financial mess and that there had been inadequate (Cont P2) accounting and misleading management information.

Clark White Publications publishers of Mobile News had already sued Scapegold for an unpaid advertising bill after Kobeissis promises of payment and claims that he had paid the overdue account turned out to be false and cheques he had issued bounced.

Other dealers told Mobile News similar stories at the time of unfulfilled promises and bounced cheques from Kobeissi.

At least 25 dealers were owed commission payments by Scapegold. at the time the company called in the receivers.

His denial comes in the face of accusations from named dealers that Orange has been allegedly tempting small and medium-sized business customers away from their regular dealer with offers of free and cheaper equipment and accessories and reduced and free connection charges.

One of the dealers complaining about alleged poaching is Colin Runham of Pagers in Wallington

Surrey. He accused Orange Direct of stealing an account: Highway Surfacing (HWS) by offering a catalogue of free phones and fitted car kits in exchange for them signing a two-year contract.

Runham last year wrote to Orange claiming: We discov-(Cont P2) ered HWS had been approached by Mr Carmino Martucci from Orange Direct Sales.

Although being told Pagers looked after the account and were happy with Orange and were upgrading all 5.1 (handsets) to 702 (handsets with car kits and vehicle installs) he insisted on getting involved and offered all this equipment plus labour free of charge on the agreement HWS sign for a further two years. Of course they agreed. We find this not only unacceptable but irresponsible business practice. We estimate our commission equipment and labour loss to be in the region of 1680.

Jones told Runham this case involved a routine cold-calling exercise and that Orange had no prior knowledge that HWS was a Pagers customer.

Jones told Mobile News:

Theres no way that we are taking that line or that kind of thing is any part of our strategy. It would be crazy for us to act in that way. If any dealer has examples I would be delighted to take them up with the dealer and address the issue said Jones.

We generate over 500000 new customers a month by means of a vast distribution and sales structure. If I believed that I could generate that amount of business and never have a situation where a direct sales person came into conflict with a dealer or a dealer found himself at odds with one of our retail shops I would be completely naive.

Buckland says that asking the dealer to assume responsibility for usage by a customer over whom the dealer has absolutely no control is unfair trading.

In his complaint to Oftel he states:

It is unfair trading to advertise a product that states the end user has no usage responsibility but to pass that usage obligation onto a third party. We find it totally unacceptable that a product that is sold as a stand alone no ties non-contractual phone should have any form of clawback. This is simple box selling. If we buy a box containing a cordless phone or an accessory we are not asked to indemnify its destination or usage in any way. Why should we be asked to do so on a pre-pay mobile phone?

Bucklands dealership has 13 retail outlets and has been established since 1986. They have an annual turnover of around 4.5 million.

He sells around 2000 handsets per month of which more than 1000 are pre-pay across all four networks.

He further points out to Oftel:

For the past three years we have been a Virtual Service Provider offering BTCellnet and Vodafone monthly billing service. This part of the business was sold to BTLumina on 31 August 2000. We purchase pre-pay mobiles from (Cont P2) whatever source has supplies as we are not able to buy them directly at a competitive price. We have been purchasing through distributors who recently have been making us sign undertakings reflecting those imposed upon them by the networks. Copies of the documents to these distributors are enclosed.

These penalties vary between 35 and 60 for either non-activation or non-usage within 90 days of activation. Whilst we can accept some responsibility for activation we cannot ensure on-going usage. We can accept that the competition is tough and margins are low but we ask a level playing field.

The fact that the networks choose to subsidise this product is a situation over which we the dealer have no control therefore it is unfair for us to have to accept responsibility for the actions of the networks.

The network admits they offer a substitution in terms for clawback to the supermarkets. It is our belief the same no clawback alternatives should be offered to all sellers of the product. We find it hard to believe that supermarkets will accept this type of clawback situation for exactly the same reasons as the dealer channel. If these terms are not applied or indeed enforced as they are in the dealer channel then again it is our contention this is unfair trading.