Primemarks bankruptcy petition against Odyssey for an alleged bad debt was defeated by Odyssey winning an injunction to stop Primemarks proceedings.

A Royal Courts of Justice Judge ruled against Primemarks Petition last Monday (May 21) and ordered Primemark which produces the Foneman system to pay 12000 costs to Odyssey within 14 days. Primemark has its own costs which could be as high as 15000 to 20000 for all three actions it is taking against Odyssey.

Primemark managing director Asif Laher said:

Primemark has issued three sets of actions against Odyssey. One is for breach of copyright. A second is for an unpaid debt. The third was a bankruptcy petition. The case on Monday referred to refers to the bankruptcy petition. The (Cont P2) matters regarding the debt and unauthorised use of our software have not been heard yet.

The conclusion of Mondays hearing does not in any way reflect the merits of Primemarks other two claims against Odyssey.

Odyssey has made pirate copies of our software and is using it to run their business Laher said.

The hearing in regards to their solvency is just a sideshow.

Odyssey joint managing director Russell Park said:

We deny we are using pirated software. Any action against us for software piracy will be defended. If Mondays hearing was a sideshow then it was a very expensive one.

At the same time Your Communications dealer manager Gordon Marks has resigned following the departure of his former bosses Tony Woolhouse and Andrew Bullock. Marks said his position had become untenable.

As national dealer manager all deals put on the table would have come through me. Ultimately my former bosses signed them off. Now they have gone it has become difficult to continue in my position.

Marks says he and Your Communications were victims of unscrupulous customers.

This follows revelations from Mobile News (May 14) that two Nottingham dealers were facing investigation for thousands of unused connected SIM cards. The dealers paid the first years line rental for the customer but were still in pocket after receiving commissions.

Sony Cellular was also hit by the same scam before Intercell became aware of its problem.

Your Communications director of mobile communications Paul Lawton said four dealerships are being investigated.

MCC of Nottingham (also known as Mobile Accessory Company or MAC international) is run by a Mike Lawson. It is being investigated for connecting over 7000 handsets to Ilkeston Co-op travel. Lawson earlier connected 1200 handsets through Sony Cellular before doing two large deals for 2300 and 5000 handsets through Intercell.

Internetworks Telecom of Stafford connected approximately 4000 handsets of which 3000 remain activated but unused to date.

Skynet a Northern-Ireland dealer connected about 1400 handsets of which 1200 remain unused. Gloucester-based Bowmont Communications has since ceased trading.

Lawton said the total figure of about 12000 connections being investigated is correct.

The figures you have obtained are about right. Vodafone flagged up a large quantity of numbers where there is little or no usage.

Lawson confirmed Your Communications could be heavily penalised if the connected SIM cards remain unused within the first six months. After this Vodafone can recover significant sums from us including their initial outlay he said.

Lawton said the Ilkeston Travel Co-op deal involved over 7000 SIM cards and will do the most damage to the company.

The Ilkeston deal has hurt us the most because only a fraction of the SIM cards have been used. But there is a big difference between that and the next significant deal with Internetworks which affects some 4000 numbers.

We have met with Internetworks. They have proposed what they intend to do to get these SIM cards into customers hands. The problem was flagged up by Vodafone because these SIM cards had been connected to the network. But after 60 days only 200 of the 4000 SIMs connected by Internetworks Telecom were making calls. We have now reached 90 days and 1000 of the 4000 SIM cards are now being used. It doesnt look like another Ilkeston situation.

Lawton could not explain why these dealers were able to connect thousands of phones to the Vodafone network and pay line rental before any customer purchased them. He declined to accuse the dealers of wrongdoing.

We probably made the deal too attractive They felt they could sustain the line rental for a few months until they had sold the SIM cards to customers he states.

We raised the alarm when Vodafone flagged up non-usage. We alerted our dealers and told them to be aware of the problem and to explain why there is non-usage if it applies to them. If after six months there is zero bill Vodafone can recover costs and payments. We may have to switch several of those SIM cards off.

Weve tightened up our procedures. If after the six months SIM cards are still seen to be unused and Vodafone implements clauses in the contract we will be liable for financial penalties. But weve made provision for those implications. It will not threaten the business.

Lawton says it is not possible to immediately disconnect all 12000 so SIM cards.

We cant switch them off until we know which ones are live and which are not. If we are certain theres no customer in possession of a particular SIM card well tell Vodafone. We will then decide whether to disconnect the handsets. It is dangerous to have live un-used SIM cards. If that is so we can let those numbers run out or disconnect them. The cost differential to us is minimal.

Lawton admits clawback action may have to be taken against dealers who have connected large amounts of unused SIM cards.

There are steps we can take either commercial or contractual. We could be making a mistake to assume that these are all carbon copy situations. We will look closely at each case and decide what actions to take. No-one knows if these connections were opportunist or fraudulent. We cannot strike off a dealer unless they have acted fraudulently or against our views of doing business. If Vodafone claims against unused connections we will try to recover commission from the dealers. But we want a life beyond this present position with our partners.

Gordon Marks said:

Have I been conned or deceived through some of the deals? Yes. Has the company has been deceived? Yes. However I have done nothing wrong. We were told that some of the deals would have very low call spend by the customers. It was a very clever scam instigated by the customers.

Marks admits it was in his own interests to put the deals through for a vast commission.

I would have made good money. But if I had known about the Vodafone clawback clause the deals would probably never been done. It was all dealt with at a higher level than me. I was not privy to Vodafones contract details. There was no mention of anything like that in my contract.

Lawton disagrees that Marks position was untenable.

We havent formally asked him to pay anything back. We have discussed the various possibilities but have not made a formal request.

Your Communications faces clawback bills from Vodafone after dealers claimed commission for up to 12000 SIM cards never activated (Mobile News May 29).

We are working very hard with Vodafone who are being really understanding. Vodafone has been kept fully informed throughout said Your Communications MD Hugh Logan

We find ourselves in a very regrettable situation but we have to manage our way out of it professionally and thats what we are doing. I sincerely hope it hasnt done us any harm in the long run. People on the receiving end have limited experience of these deceptions. When these guys set out to scam you they make sure they have every avenue covered. They adopt a completely professional approach to the scam.The situation accurately reported in Mobile News didnt arise as a result of our being hoodwinked over one incident. We were told a story which was totally plausible. And we fell for it Logan admits.

John Peck of Wigston dealership Telafonic Wireless Media says Midland Distributions franchise arm Midland Communications has unethically used data provided by Orange for processing commissions to approach his former customers by phone and text message.

Peck claims he purchased a Midland Phone Line franchise in July 1999 but terminated it last January. He says that Midland was offered the opportunity to buy back the business and customer base but declined as they owned the premises.

He alleges that within two weeks of vacating the premises Midland opened up its own franchise and within six months had started canvassing former customers by phone and text.

I dont know how Midland can be allowed to do this. They blun-dered by calling a former customer of mine who is now my business partner and offered him an upgrade phone.

I connected the phone originally and the only way that they could have obtained the information is via Orange says Peck.

Orange provides its distributors with a connection record giving them a customer name IMEI number and telephone number so that they can process commissions. That information should not be used by a distributor to grab customers. I dont think its right.

Midland Distribution MD Mark Liley replied:

Mr Peck was allowed to move into one of the buildings owned by us and he fitted it out. He was allowed to use it and then he walked away.

If he sold the business or walked away then he left the customer base with it. I agree no (Cont P2)distributor should target his dealers customer base. But thats not the case here.

Peck insists that Liley was not handed back the business. Only the building.

We offered Midland the business. They didnt want to pay for it.

They told us that if we didnt want to run a franchise operation we would have to clear out because the building belonged to them.

We gave them back an empty shell. Not a going concern. In any case the shop was shut for two weeks after we handed the keys back to when they re-opened.

Peck admits he bought a customer base but not the one he sold.

Midland never purchased anything back from us. When we bought the shop there were only about 350 or so customers. We increased this to more than 2500. I would gladly have sold them the customer base. But they didnt want to buy.

Peck reckons that Midlands use of customer information has serious implications on the industry.

I dont think its right that they can use customer data without the permission of the customer. A dealer takes a customers details and passes that on to Orange.

The distributor only gets that information to process his commission claim and for no other reason. There are some issues with the Data Protection Act if data is being used without customers consent.

There are a lot of franchise operations being offered to dealers but there is no legislation or governing body to ensure that these are supported properly.

Distributors want to form closer ties with dealers through these franchise agreements and branding exercises.

But it can be dangerous because dealers can find their customer base tied in to their distributor or the owners of the franchise without them realising it. Dealers need to understand what they are getting involved in warned Peck.

Dealers have again complained that Orange is attempting to bypass the dealer channel – by offering customers a better deal through its own upgrade team. Orange says that the letter was only sent to One 2 One Precept OVP customers in fulfilment of Talkplan terms and conditions.

An Orange spokesperson said

Orange recently communicated with customers on the OVP Precept plan to outline their upgrade options. Customers who joined Orange on this plan were entitled to receive a free upgrade after two years. Orange is simply fulfilling that original promise. This upgrade affects a small proportion of Orange customers.

We are not aware of any customer complaints concerning the way in which this offer has been communicated to them Orange values its relationship with its dealers.

We continue to work with them to develop and implement appropriate methods and schemes for the future management of our customers.

Meanwhile a Welsh dealer has accused Orange of poaching his customers.

Mike Lynch of Premier Line Communications (trading as PhoneLine) has accused Orange Corporate of approaching one of his Corporate customers by offering them a better deal.

Orange Corporate offered my customer free Nokia 8210s and Nokia Premicells. I am fed up. Orange is taking away my livelihood Lynch claimed.

However a few hours after contacting us he retracted his complaint.

Ive spoken to Orange and they have agreed to give me my customer back. They apologised and told me I should have gone to them first not Mobile News Lynch added.

Lynchs supplying distributor is Midland Distribution. Its national sales manager added:

Theres no problem between Orange and Premier Line. Orange will allow him to offer the deal to his customer at Orange Corporate rates. Orange admits there is a problem with crossover between its direct sales department and some dealers. But is doing all it can to support its dealers.

Orange vice president for business solutions Richard Hanscott told Mobile News:

Our direct sales force focus has been changed so that they are no longer focusing on the small business sector. They will focus solely on the medium and large business sectors.

We have a new process where our direct sales force must check with corporate customers to see if they are already in discussions or doing business with a dealer. If they are the direct sales force will leave the business to the dealer.

Hanscott said that Orange was able to use its customer database to help its direct sales force avoid approaching dealers customers. But he says customer databases are not available to the direct sales team.

They could use it to canvass dealers customers. If they had access to this information they could avoid approaching certain corporates. But its a case of damned if you do and damned if you dont. Its better if the direct sales force dont have access to the information.

Hanscott admits dealers are rarely able to compete with Orange Corporate on price. He said that Orange is looking at ways to manage pricing issues.

Creditors will vote on the offer at a meeting on June 19 to be held at the Clifton Ford Hotel in London.

Administrators Levy Gee took over the affairs of Paragon Global (formerly Fone Range UK) on March 20 after a series of Winding Up Orders and statutory demands were served on the company.

Fone Range lost 708000 in the nine months to December last year.

Fone Range founders Jay and Vimal Pau set up a subsidiary called Fone Range Partnerships which is now trading under the name Blue-I International.

This has the licences to distribute accessories for Warner Brothers and Coca-Cola. The administrators say it is believed that company has a viable future.

The Creditors Voluntary Arrangement depends on Blue-I paying the administrators 300000 in six instalments of 50000 every quarter from next June for the Goodwill of Fone Range/Paragon. This will give unsecured creditors their estimated dividend of 9p in the 1.

Administrator Shay Bannon said:

The meeting has been called to explain to creditors the situation and outline the proposals contained in the letter to creditors.

The decision to go into liquidation or to enter a voluntary arrangement will be decided by us depending on which is the least expensive option.

Bannon declined to comment on the proposed deal with Blue-I. Meanwhile auctioneers Philip Davies has been appointed by Bannon to sell off 750000 of accessories belonging to Paragon (Fone Range).

4500 jobs are to be shed worldwide as part of a restructuring programme to cut losses caused by the failure of an analogue cordless telephone business it purchased from Lucent. Vtech is suing Lucent for $170million claiming Lucent misrepresented facts relating to the purchase.

A spokesperson said

We are closing the R& D centre in line with the companys global consolidation strategy with 45 redundancies. UK sales and marketing staff will move to Farnborough. The closure will not affect continuing sales and marketing activity for VTech mobile products in the UK. R&D activity will move to (Cont P2) VTechs operation in Calgary Canada where we are developing mobile phones for the US market.

VTech sales and marketing director Robert Moran denies that redundancies of 34 R & D staff who developed VTechs GSM phones will affect the business.

Westcott who spent nine years at Ericsson has been offered an equity stake in the company.

He had only just been promoted to vice president of Northern Europe following the return from Singapore of marketing manager Alex Rodrigues who is now in charge of Ericssons mobile operations in the UK.

Keith will be joining us very shortly said Kondor founder Malcolm Bartlett who has also appointed Malcolm Benson as chief executive officer. Benson was formerly CEO of retail Software Company Matra Systems.

We are delighted to have secured two such strong candidates here with complementary skills.

Keith Westcott brings his tremendous experience and good standing in the industry while Malcolm Benson has extensive experience in distribution and sales.

These are two big hitters. We will get a good result from it.

Bartlett says Westcotts decision to leave Ericsson is a reflection on Kondors ambition rather than Ericssons troublesome year.

We are offering Keith some equity and it is an exciting change. He has the opportunity to help grow this company and enjoy the benefit of it. You dont get this opportunity in a more corporate environment. (Cont P2) Ericsson has an exciting future and its deal with Sony could revitalise the company.

Keiths decision to move is not due to any disenchantment with Ericsson. The important think for Kondor now is focus on our acquisition program and keep growing. Well be better equipped to do this with Keith Westcott and Malcolm Benson on board.

It is believed only 30 mainly-engineering staff remain to maintain the network.

Deloitte and Touche confirmed the layoffs saying: it has been necessary to downsize the Dolphin workforce.

But the administrators are continuing to deal with the day-to-day operations of the business with the support of the retained employees and the customers and suppliers of Dolphin.

While it is too early to state if and when a sale may be concluded every effort is being made to preserve the business.

Deloitte and Touche had set a deadline of September 14 for potential buyers to put in a bid for Dolphin UKs business and assets including its national network which remains operational. (Cont P2)

The deadline passed with no firm bids received. Dolphin passed into administration in August with debts estimated to be $1.2 billion.

Dolphin provided business TETRA communication services to 273500 subscribers across Europe.

The UK network was launched in August 1999 but by August 2001 had only attracted 76000 subscribers.

In November last year Dolphin admitted it had yet to secure financing needed to fulfil its 2001 investment plans.

In December the company announced it required a further $700 million of funding to carry out its plans to rollout new networks second generation handsets and maintain services over the network.

The company ran up huge losses caused by rolling out and launching the network subsidies on handsets and marketing spend. It covered 90 per cent of the UK population.

The service which was introduced to key dealers at a low-key trade launch in January has now been shelved because of adverse conditions on the telecoms market.

The decision is a blow for Caudwells distribution arm 20:20 Logistics which won the contract to source and package SIMs and handsets for the

OnStar service and deal with all admin dealer training and trade customer service.

One 2 One would have been the partner network.

An OnStar spokesperson confirmed the service had been shelved but declined to give any factual details.

A spokesman for 20:20 Logistics said:

We were appointed to look after product distribution sales and dealer support for General Motors virtual network in the UK and it is very disappointing to hear that the launch hasbeen delayed. Under the current market conditions however we fully understand this decision and now look forward to working on the OnStar project in the future when the time is right.

As well as being a mobile phone voice service the plan for OnStar was for a personalised web portal that learned the personal lifestyle preferences of its users and could act as a 24-hour virtual assistant.

The service would have been accessed from mobile phones PCs special in-car terminals (likely to be fitted to GM vehicles) and fixed lines to a customer service call centre.

In the USA OnStar offers GM vehicle owners GPS location and recovery telematics services such as remote diagnostics remote door unlocking and automatic notofication when an airbag is triggered.