ICO Global Communications (Holdings) ICO Global Communications which was established in January 1995 as a private company to provide global mobile personal communications has failed to receive binding agreements that investors will buy $600 million of B shares and convertible notes.

And Iridium is now under the protection from the USA courts from bankruptcy.

ICOs Hammersmith-based office last week laid off 40 members of staff. Casualties included marketing boss Chris Moss who joined ICO a year ago. Moss is widely credited with coming up with Oranges brand identity when he worked at Orange in 1993 and 1994.

ICO and its investors are now considering a modification to its financing proposal which would result in a lower minimum investment threshold and substantial deferrals of amounts payable in 1999 to suppliers under major contracts. The proposal would be subject to shareholder and bondholder approvals.

Major suppliers to ICO have deferred payment on some contracts. The company has not paid the interest due August 2 on some of its debt.

A gloomy statement from ICO said:

There are substantial uncertainties and significant conditions associated with the completion of the modified financing proposal. No assurance can be given that the modified financing proposal will be agreed by the Company and its strategic investors or if agreed that the financing will be completed.

As previously disclosed the Company was unsuccessful in its attempt to raise equity from its shareholders and strategic investors through its rights offering which expired on July 27.

Failure to complete the financing proposal or the needed subsequent financings to the point of generating positive cash flow from operations will have a material adverse effect on the Companys liquidity results of operations and financial condition as well as on the companys continued viability.

Meanwhile Iridium LLC (North America) has filed for Chapter 11 bankruptcy protection to stave off creditors who are owed more than $3 billion.The Chapter 11 procedure will give the financially-stricken global mobile satellite phone network a chance to restructure itself.

Major shareholders Motorola and Nippon Iridium say they will invest additional funds to support the restructuring process.

We remain in full support of Iridium LLC as the company goes through its restructuring under Chapter 11 Bankruptcy proceedings said Jim Walz CEO and president of Iridium North America:

Iridium North America is an independent and wholly-owned company. We own the licenses to use the Iridium satellite constellation. Therefore there will be no lapse in Iridium service provided by Iridium North America and we will continue to work with our service providers to sell the Iridium product and service. We have a solid business plan a sound financial structure and a satisfied customer base. During the month of July Iridium North America enjoyed its highest percentage of subscriber growth to date indicating acceptance of our new lower airtime rates and decreased equipment costs.

American law allows Iridium to complete its financial restructuring under a court-supervised process. Iridium says its customers will not be affected by this action and that there will be no interruption of service.

The action is the most efficient way to conclude Iridiums restructuring negotiations said John Richardson CEO of Iridium LLC.

We are confident that Iridium will emerge from this process as a stronger and more vibrant company in the telecommunications marketplace.

Motorola says it will continue its full operational support during the reorganization process and continue to invest the next generation of Iridium products.

Motorola stated:

We are encouraged by Iridium managements decision to pursue this course for restructuring the business. Given the progress being made to date to restructure Iridiums capital structure we are optimistic that a restructuring plan can be accomplished within 30 days.

Iridium South Pacific has reassured Iridium customers that it will be business as usual for Iridium in Australia New Zealand and the South Pacific. Iridium South Pacific is an independent Australian telecommunications carrier majority owned by Japanese electronics and telecommunications giants DDI Corporation and Kyocera Corporation and trades as a separate entity.

We are confident that Iridium LLC will successfully restructure in the USA. In reality it has no operational impact on Iridium South Pacific. Iridium South Pacific will continue to be a force in the global mobile communication business into the future said Carlton Jennings CEO of Iridium South Pacific.

NB: The ICO and Iridium feature on page 20 was produced before these latest developments.

OFTEL is also looking into Cellnets pre-paid offers to make sure similar issues do not arise. OFTEL has also received a complaint from another company regarding this issue.

Independent service providers led by Cellcom had complained to OFTEL that Vodafone has been selling Pay As You Talk on unfair terms so service providers couldnt compete.

OFTEL has upheld the complaint. Vodafone has now decided to offer pre-pay services on different terms to independent service providers making it easier for them to introduce competing pre-pay offerings.

Pre-pay packages have been the main engine of growth of the mobile market and have proved immensely popular with consumers. It is important for both competition and choice that independent service providers are able to offer their own pre-pay packages to their own customers. But to do this they need to acquire services from Vodafone. This would increase choice and competition to consumers benefit Oftel director general David Edmonds said.

It appeared from our investigation that Vodafone in supplying these services would be discriminating in favour of its own business. Such behaviour would be anti-competitive and unacceptable. Vodafone has accepted OFTELs view and amended its terms accordingly. While this prevents the need for immediate enforcement action Oftel will continue to monitor the sit-uation and the effect of the revised terms.

Vodafone must offer independent service providers services under its licence which obliges the network not to discriminate unduly in favour of its own businesses in the provision of services.

Service providers in the pre-pay sector have been simply acting as distributors. They do not have any contractual relations with end users and have no ability to tailor retail services.

Cellcom argued that a small service provider with few subscribers did not receive enough discount to cover costs and earn a reasonable return whereas Vodafones direct business received the maximum discount and was able to operate with a reasonable profit.

Vodafones new terms are also based on a volume discount. But the percentage discount starts off at a higher rate and fewer subscribers are required to secure higher rates than under the old terms.

Cellcom had alleged that Vodafone apparently refused to sell it the underlying telecoms service at the rate it alleges is paid by Vodafones direct business.

Cellcom estimated Vodafones direct business was purchasing the basic network service from Vodafones network business for no more than 48.00 annually or 4.00 per month. But Cellcom currently pays Vodafone up to 7.85 per month under the current standard service provider contract for the same telecommunications service.

Cellcom said it has repeatedly asked Vodafone to provide it with the underlying telecommunications service involved for 4.00 or less but that Vodafone refused each of its requests.

The idea is to give JWE customers a converged mobile and fixed service with a single bill. ADT is being renamed JWE Communications.

The companys managing director Nigel Adams remains with the company and is expected to join the main board in six months in charge of JWE Telecoms fixed line services.

A key feature of our short-term strategy is the development of our ability to offer converged fixed and mobile services and product. The acquisition of ADT is a significant step forward in that direction and one from which we can build a leading all-round telecommunications operation said JWE chief executive Tony Farmer.

JWE has had its share price pushed below 1 lately as the City responded badly to a recent profits warning.

A total of 350 Brightpoint employees around the world are to lose their jobs.

The UK closure follows disastrous losses made by its UK trading division which was closed down last year. The company was never able to make up the lost revenue.

Brightpoint will also have to write off the 8 million it reportedly paid a year ago to buy distributor and service provider WaveTech.

The abandonment of the UK can only mean good news for ex-WaveTech director Kevin Brummitt who will probably now be free to re-enter the UK distribution business free of any anti-competitive restraints.

Only last month Brightpoints European president Anders Tortstensson told Mobile News the company was committed to its UK business and would be looking for network contracts.

Torstensson is believed to hold one of two executive vice president positions to be eliminated

The official Brightpoint statement says:

The Companys operations in the United Kingdom have encountered increased competitive pressures from trading companies (who buy product from sources other than the wireless equipment manufacturers and sell the product to wholesale customers other than network operators or their dealers or other representatives) and a continuing trend in the United Kingdom of network operators dealing directly with handset manufacturers.

The Plan includes the complete disposal of operations in the United Kingdom including the sale of its airtime reselling business completed in June 1999. It is currently planned that the remaining operations in the United Kingdom will be discontinued no later than July 31 1999.

An informed trade source told Mobile News:

Brightpoint could so easily have been a major player in the UK given the manufacturing accounts it enjoyed. This was not the case. The blame has to fall upon the shoulders of Torstensson. His fundamental decision to close down the trade division without securing a replacement for this revenue was a major mistake. The carried-forward losses made it virtually impossible for them to make a profit. Brightpoints business in the USA remains intact. But analysts in the USA are eagerly awaiting future results.

Brightpoint UK reportedly made a 500000 profit in one month but lost it all soon after with an abortive deal involving around 44000 Nokia Ringo phones understood to be languishing in the companys warehouse.

Brightpoint says there will also be a significant restructuring of Brightpoints China operations. Brightpoint admits it has had problems getting adequate supplies of handsets which coupled with a difficult competitive environment and disappointing joint operations has made its China operations unprofitable.

Brightpoint will exit its two joint operations in China and intends to develop a new strategic alliance. It is also jettisoning its 67 per cent interest in a Hong Kong-based accessories company and are axing operations in Argentina and Poland which were not performing to the Companys goals due primarily to scale and market factors.

The Taiwan presence will be scaled down by closing certain facilities. The distribution centre in the Netherlands will also be shut leaving the distribution centre in Germany to handle this region.

The restructuring and closures will cost Brightpoint from between $75 million to $90 million in the write-off of goodwill and investments accounts receivable inventory and fixed and other assets related to the closing of the divisions and redundancy payments.

Some analysts are mooting that a merger between Brightpoint and CellStar would make strategic sense for both parties.

The consortium will be known as Orange a.s. The other consortium member is GiTY a Czech IT and telecom company.

If the bid for the first and only GSM 1800 licence is successful the new company promises to create up to 2000 jobs over five years in the Czech Republic and provide the latest in telecoms training.

Orange also plans to locate offices and customer call centres in locations including Prague Ostrava and Pilsen.

Judge Anthony Ensor told him there had been a real possibility that the British Airways flight from Madrid to Manchester last September which had 91 people on board could have been at risk.

The court had heard that Whitehouse an oil worker repeatedly refused to switch off his phone after being spotted with it on the Boeing 737.

Although he made no airborne calls experts said interference from the phone could have sparked an explosion or affected the aeroplanes navigational systems as it flew at 31000 feet.

Whitehouse was first asked by cabin crew to turn the mobile off after he was spotted typing I love you onto the text face.

When told it might interfere with navigation he replied: Why? Are we going to get lost?

Sentencing him Judge Ensor said:

You had no regard for the alarm that would be caused to passengers by your stubborn and ignorant behaviour.

The Judge said Whitehouse had treated the aircrafts pilot David Travis with arrogance and disdain when he refused to hand over his phone.

Any sentence must not only punish you but act as a warning to others who might be inclined to behave similarly he said urging the Civil Aviation Authority to conclude investigations into legislation specifically banning mobile phones on planes in line with laws in the United States and Germany.

Proliferation of ownership of mobile phones and an increasing number of reports from pilots of electro-magnetic interference makes this a priority he said.

Whitehouse is the first passenger to be prosecuted under the 1995 Air Navigation Order (see phones on planes Feature).

This puts the Finnish mobile phone manufacturer ahead of Mercedes (12) Nescafe (13) and Gillette (15) and other household names such as Sony Kodak and Nike.

Coca-Cola is the top band followed by Microsoft and IBM.

Nokias rivals Motorola and Ericsson do not feature at all in Interbrands league table.

Five years ago it would have been almost unimaginable for Nokia to be sitting alongside such long-time established global players as McDonalds and Mercedes Benz said Nokias UK and Ireland head of marketing Alison Brolls.

For the last few months BTCellnet has been re-evaluating its involvement with the Scheme and was apparently on the verge of pulling its support and 200000 or so of funding.

The FCS receives support including financial support from all sectors of the industry. But the lions share of the money required to keep the inspectors on the road and the level of criminality at a (sometimes barely) manageable level comes from Vodafone Cellnet One 2 One and Orange.

The Scheme is paid for by contributions from all the networks and cant work without the involvement of all four. If BTCellnet had chosen not to continue supporting the Scheme it could not have been anywhere near as effective say industry insiders.

Im extremely pleased the uncertainty has ended said FCS chairman Jonathan Clark.

I had heard they (BTCellnet) wanted the Scheme to be extended to be more involved in fraud and that pleases me. The Scheme is run by the industry which sets the rules.

This is an industry-wide Scheme and it can only work by everyone working together.

Clark paid tribute to the Crime Prevention Inspectorate staff who kept on with their jobs and brought in even more spectacular results through a period of uncertainty.

In May BTCellnet said it had been reluctant to commit significant additional resources to the FCS without having a stronger understanding about how the FCS would structure itself and deliver the objectives that would inevitably accompany increased resources.

The improvements take effect on 1 September and are the second major change announced so far this year. The changes contain a combination of more bundled minutes reduced call rates and lower monthly line rental. Medium to heavy users will receive increases in inclusive minutes each month varying from an extra 45 minutes on Vodafone 120 to an extra 2500 minutes on Vodafone 7500.

The most significant price cut will be enjoyed by customers on Vodafone 120 (formerly Vodafone 75) who will see a reduction in the price of peak calls from 28p a minute to 25p a min as well as 60 per cent more inclusive minutes. Customers on Vodafone 3500 and Vodafone 7500 will benefit from monthly line rental reductions of 11.50 and 39.38 respectively.

Vodafone will also now align its Group Saver Tariffs with the standard tariffs so that the bundled minutes are the same for both. Customers on Group Saver 60 and Group Saver 120 will receive twice as many inclusive minutes as at present.

Vodafones Group Saver range of tariffs enable customers to connect additional handsets for 15 and benefit from cheap local calls and calls to other Vodafone mobiles. Vodafone Business Tariff customers get a reduction in the peak calling rate from 16p to 15p from 1 September 1999.

Unused minutes from month one are available in month two. If still not used up roll forward to month three. If at the end of month three the minutes originating in month one remain unused they are subsequently lost.

The Bundle Rollover product will only be made available through service providers who undertake to register for the programme.

Fifty eight dealers were reported for serious breaches of the rules 20 notices of breach were issued and 39 arrests were made.

More than 100 intelligence bulletins were issued saving companies hundreds of thousands of pounds.

The Scheme has been successful in its own right but more importantly in the part it is increasingly playing in uncovering large scale and organised crime in the industry said FCS chairman Jonathan Clark at the FCSs AGM last week.

The operation of the Scheme is proving to be an essential framework for detecting and preventing a range of criminal activities detrimental to all careful and honest businesses in the industry (see Crime Prevention Feature).