Meanwhile a spokesperson from the Department of Trade and Industry was unable to confirm or deny industry rumours that the RSL COM directors were under investigation over allegations that RSL COM was trading while it was insolvent.

A Vodafone spokesperson told Mobile News:

Such investigations are not conducted publicly. We investigate hundreds of allegations a year and never issue comment until our investigations are complete.

We are buying 40000 RSL COM customers who are connected to Vodafone. We are also acquiring a handful of BTCellnet customers who are part of one particular account. The deal will take effect at the end of October. We are not going to reveal the amount paid. In the acquisition of these subscribers it is Vodafones intention to work closely with the dealer community who were involved with RSL COM so that we ensure the future retention of those customers.

Up to 60000 BTCellnet accounts were initially involved when RSL Com went into administration. However because of the protracted nature of the negotiations some customers will have churned as dealers sought to protect their positions.

At the time of going to press PwC said the situation is progressing and all parties are working hard to bring the deal to a conclusion.

BTCellnet sales director Mark Stansfeld said:

We have made significant progress and fully expect to have completed the assignment of RSL customers who are connected to BTCellnet (by the time people read this report). It has been a protracted process because of the complexity of the RSL situation and having to work through Pricewaterhouse-Coopers.

We are writing to all (Cont P2) end users and to dealers with whom we have a direct relationship to clarify the position. Any BTCellnet accredited dealers or distributors with whom we have an ongoing relationship will earn commission on RSL accounts as per the current BTCellnet commission arrangements.

We were under no obligation to pay ongoing commissions but we have a responsibility to dealers with whom we already have a relationship. Dealers had a revenue stream from RSL customers. These customers still need to be serviced.

Stansfeld confirmed that dealers could not expect payments under the RSL CP2000 plan due in October.

We cant do anything about the October payments that are due to dealers from RSL in accordance with the CP2000 plan. Wed like to help but there simply isnt the money. Anybody who hasnt already developed a relationship with BTCellnet is welcome to talk to us provided they deliver high-value post-pay customers. There has been some indicationthat the RSL base is 60000 customers. But some may have been churned. Some will have fallen by the wayside as will be evidenced when due diligence is conducted Stansfeld said.

A Vodafone insider told Mobile News:

We started getting closer to RSL COM dealers last year because we had our doubts as to whether RSL could pull this one off.

Half of these dealers already had a relationship with us. But we should be able to pick up some additional business as a result.

Our concern has to be to maintain the base. If we dont have a relationship with the dealers they are going to churn pretty aggressively. We have evidence that the RSL base is already suffering substantial levels of churn.

Knights worked for 3@ telecom between 1994 and 1997. Vodafone acquired 3@ in 1999 for 7 million.

Knights originally demanded that 3@ boss Freddie Fazelynia (who is now a director of Yes Telecom) should pay. Fazelynia refused and Knights legal advisors told them to go after Vodafone as it was a company debt.

At a hearing at Manchester county court last June Vodafone successfully defended Knights action. However Knights appealed against that judgment on the grounds that Vodafone broke Civil Procedure Rules (CPR) by manipulating evidence.

The latest development is that the Court of Appeal has backed Knights case and listed it for a full appeal hearing.

Knights proprietor Allan Knight said the company now has a great chance of winning its action against Vodafone.

Vodafone now has to overturn the statement made by Lord Justice Clarke. We have a great chance of winning he told Mobile News.

Knight is seeking exemplary and punitive damages for the destruction of his business and claims non-payment was a deliberate ploy.

At the time of going to press Vodafone and Freddie Fazelynia were unavailable for comment.

BTCellnet sales director Mark Stansfield told Mobile News:

BTCellnet has been informed that RSL has gone into receivership and at the moment we are exploring the opportunity but no definite decision has been made yet.

RSL COM managing director Barry Mowbray planned to lead a management buyout (Mobile News May 14) but failed to meet the June 27 deadline set by administrators PricewaterhouseCoopers. Around 115 people have been laid off.

RSL COM UK was allowed to continue trading on its own in March while actively looking for a buyer after parent company RSL Communications Ltd entered insolvency proceedings.

PricewaterhouseCoopers spokesperson Lorna Siddall confirmed that 115 people out of 264 had lost their jobs. The redundancies are spread over Basingstoke (70) London (5) and Telford (30).

RSL COM dealers now face the prospect of losing thousands of pounds of their first years commissions. These are due in September 2001 as part of RSL COMs Commission Plan 2000.

Barry Clifford of Bath-based Avon Technical Services owner said:

I assume that the yearly bonuses wont be paid. That wont affect us much because we didnt expect payment. Other dealers subsidised new connections on account of those bonuses and they (Cont P10) will really feel it. Karen Fulbrook of Hampshire Radio Phones said:

I think we can kiss the commisions goodbye. It feels like Im being dangled over a precipice. We all knew it was going to happen.

Fulbrook and Clifford agree that whoever decides the company needs to do so now.

Fulbrook added:

The longer they leave it the less there is left of it. By Friday most of my customers had agreed they would move to another service provider if we need to.

They dont want to lose the service theyve had from us for the last 12 to 15 years.

Whoever buys the base needs to do it fast or there will be no dealers or subscribers left Fullbrook warned.

Clifford also says dealers wont wait around too long for a buyer.

The adminstrator needs to sell the business now because he must be inundated with applications to migrate customers to other service providers from dealers and for disconnection notices.

Customers need to maintain their service. Dealers need to make a living and look after their customers. I hope they get something sorted out by the end of the week or they wont have anything to sell. There are 70 or so very loyal dealers whose sole business was RSL. They wont sit around and wait for something to happen.

Im extremely disappointed that this has happened from a company perspective and on behalf of our customers. We supported RSL COM from day one. We are in a difficult situation because we dont know what to do with our customers. No-one is processing anything at the moment and in my view that means RSL is in breach of its contract.

Clifford says hes not convinced Barry Mowbrays buyout attempt was all it was cracked up to be.

I understand the administrator set a date of July 31 to sell RSL COM. I assume some of the people bidding were trying to play a joker and wait until after the deadline to buy it at a bargain price. Ive got no idea who will buy the base. There arent many companies that could buy it.

Says Fulbrook:

I think we were gullible to believe the management buyout would work. Obviously it fell flat on its face last week. Dealers are moving their customers to other service providers. A year ago most people started to hedge their bets and to spread their connections through more than one service provider. RSL has never been good at paying commissions. None of us can do anything until the new service provider takes over We cannot service our customers. We couldnt afford to move all our customers to another SP in March in case the buyout had succeeded. No one was likely to buy the company knowing they could wait until the administrator was forced to sell it off for a much lower one. Someone will buy it. The problem is who and how quickly? I wont give my business to anyone.

RSLs troubles began last year when the company laid off 60 staff following a shift from the consumer to the business market.

This March the company went into adminstration but was allowed to continue trading normally after parent company RSL COM Europe and a number of other RSL COM sunsidiaries went into administrative receivership.

At the time managing director Barry Mowbray told dealers:

It is business as usual for the UK company. Commissions will continue to be paid as usual.

PricewaterhouseCoopers the parent companys provisional liquidators indicated that it wanted to sell the business as a going concern. Its US parent suspended interest payments on some of its bonds and reportedly deferred repayment of a $100m loan.

The dealers who acted as agents for Sheffield-based service provider Intercell are in the Nottingham area

Intercell was sold to Norweb Telecom last year. The sting is believed to involved a company called Ilkeston Co-Op which took delivery of thousands of phones that were either never delivered or activated.

Mobile News understands as many as 7000 connections may have been involved.

It is alleged that the dealers under investigation paid Ilkestons first-years line rental on the connections and pocketed the balance of the connection commission. The system depended on the co-operation of an employee at Ilkeston.

The connections were put through Intercell which was an independent service provider until it was sold to Norweb Telecom.

At the time Intercell was paying 245 for a business connection with a years line rental of 11.91 per month equivalent to 142.93 a year.

The dealers concerned apparently paid Ilkeston the money to cover the line rental and still made 100 profit per line.

A source with an understanding of the system told us:

The terms and conditions of the contract with Vodafone is that commission is based on intent to use the phone. There was no intent. They werent supplying any phones. The two losers are Vodafone who paid 90 per connection and the service provider who made up the balance.

A statement from Your Communications said:

Your Communications is currently investigating the activities of two dealers who acted as its agents in the Nottingham area.

Pending the possibility of legal proceedings it would be inappropriate to comment on the exact nature of the investigation. But the investigation does involve the supply of SIM cards and handsets to a third party. Your Communications and Vodafone are working to ensure that all dealers adhere to best practice in the interests of the industry.

Meanwhile Your Communications MD Hugh Logan has appointed a new man to run the mobile communications division. He is Paul Lawton who joins from Fones Direct.

The move is part of a strategy to increase the number of non-executive directorships on the board currently standing at five. The retailer said it was looking for an additional non-executive director and would announce an appointment in due course.

Esom was named managing director of the John Lewis Partnership-owned supermarket chain in 2002 after six years at Waitrose as director of buying. He previously worked in a number of buying roles at Sainsburys.

According to Carphone Warehouse director of corporate affaires Peregrine Riviere it is Esoms experience in developing a high-end retailer against stiff competition from lower margin higher volume rivals such as Tesco that Carphone Warehouse will find especially valuable.

The role is to bring a broad range of experience to the board said Riviere. He has had a successful career buying in a period of slowdown and managed to carve out a niche in the higher end of the market.

He has tremendous experience in store roll-out to different markets. While we pride ourselves on already being good at this its always good to get a second opinion.

Primemark which produces FoneMan software has started a High Court action against Odyssey alleging that Odyssey has been using unlicensed copies of its software in its branches in Hatfield Croydon Coventry Ilford and Basildon.

Primemark says it has refused to supply Odyssey with more legitimate copies as Odyssey had disputed payment (now the subject of a court action).

Primemark director Asif Laher said:

Odyssey has been using FoneMan software for four years and placed regular repeat orders. We refused to supply further software or services since April last year following a payment dispute. Yet Odyssey still continues to use the FoneMan system across its outlets.

We believe five unlicensed copies have been made. Our solicitors have been unable to obtain a proper explanation from Odyssey. The continued use of FoneMan at Odysseys branches can only reflect a satisfaction of its benefits.

Laher says Primemark has already obtained out-of-court settlements against two other dealers discovered to be using the software without paying for a licence.

High Court proceedings are being issued against Odyssey Corporation following its persistent failure to provide a proper explanation for use of unlicensed software at five of its outlets said Laher.

But Odyssey rejects Primemarks claims.Odyssey joint managing director Russell Park said:

After adopting FoneMan software since 1997 we have lost tens of thousands of pounds as a result of Primemark failing to meet its performance promises.

Against this background Odyssey has been unwilling to pay inappropriate and some dubious invoices. We are seeking substantial compensation. Odyssey does not owe Primemark any money. Nor has there been any illegal copying of software said Park.

We have invested in a new software system to replace Foneman Park told Mobile News.

Park also dismissed Lahers claims that Odyssey was not paying for its use of Foneman software because of financial problems.

We have had a successful year. Turnover has reached record levels and profits to the year ending February 2001 are expected to be in the region of 500000 Park said.

Targets included London-based Elite Mobile Accessories.

Elite managing director Ajay Gokani confirmed: We did get a letter from Nokia at CeBIT but it was written in German and we passed it on to our solicitors. We werent displaying any fascias at CeBIT. The only item bearing anything to do with Nokia were pictures of fascias in our catalogue. I cant comment further until Ive heard back from our solicitors.

Nokia also announced intentions to take legal action in the UK against companies that deliberately infringe and flout its registered design rights intellectual property rights and copyright.

Commenting on the action taken at CeBIT Nokia business development manager Mark Squires said:

We served letters to three companies at CeBIT but in each case we approached the companies in question beforehand and told them what we werent happy with.

They were asked politely not to display any offending items. Two of the companies have since agreed to work with us but we are still in discussion with the third. European law is far stricter on the subject and the guidelines are stricter. We served letters at CeBIT because people were deliberately flaunting the law we didnt have any choice adds Squires

It looks like a deal might go through that will pay a dividend to unsecured creditors. But until the deal is signed nothing is guaranteed said joint administrator Shay Bannon of of accountants Levy Gee

Fone Range founders Jay and Vimal Pau are now operating through another company called Bluetok. This was formerly known as Fone Range Partnerships.

A statement from Paragon issued last Tuesday (April 10) confirmed the company was attempting to seek a Voluntary Arrangement with its creditors.

The statement blamed the Fone Range/Paragon collapse on increased margin pressure in combination with high levels of fixed overheads adding:

The directors have considered every avenue to return the company to profitability but have reached the conclusion that the appointment of administrators and a new management structure will achieve the most advantageous outcome for employees and creditors and will support the groups future business plans.

We now have a clear way forward to develop the business opportunities that exist within the current group structure whilst protecting the interests of all parties to the fullest extent possible.

But a letter written by Bannon two days before this statement said Paragon had ceased trading.

The administrators letter to Fone Ranges creditors said:

Regrettably circumstances do not enable me to consider further trading and the company has ceased to trade with immediate effect.

It warned unsecured creditors were unlikely to see their money again. Jay Pau said it was not true that Paragon had ceased trading. Administrator Shay Bannon admitted that The situation has changed since the letter was written.

Paragon said contracts have been drawn up with a potential buyer but would not comment further.

Motorola UK director of dommunications and public affairs Mark Durrant told Mobile News that the reports carried in the national press and TV were total speculation.

Durrant says that Motorola will not be announcing any decision until it has consulted with staff.

A consultation forum has been set up so that elected employees can consult on the companys proposals. No proposal has yet been put forth from the company.

It was reported that the Prime Minister Tony Blair had intervened personally to try and safeguard the factory.

A Downing Street press spokesperson added:

Tony Blair had a telephone conversation with the president of Motorola Chris Galvin and he made it clear that we are keen to explore if there is anything we can do to influence the decision.

So if Motorola had no intention to shut down the plant why did Blair feel it necessary to call Motorola president Galvin to intervene?

Apparently the Minister for Enterprise Scottish MP Wendy Alexander became aware that Motorola was coming under increasing pressure to announce a downsizing of its operations in conjunction with its latest reports showing losses to appease its shareholders.

On returning to the United Kingdom Alexander called a meeting to make a case for Motorola to look at the broader picture and to take time to look at the significance of Bathgate to its operations in Europe. This was followed up by Blairs call to Galvin to make a case for Scotland and the labour force of Scotland.

After this conversation Motorolas president apparently confirmed he would be happy to continue discussions and not make an immediate decision on the future of the plant.

Speculation has grown over the closure of Bathgate for a number of reasons.

In September last year Motorola reduced production from three shifts per day to two and has shut the plant for the first time over this coming Easter Holiday.

In March this year Motorola also announced that part of its next major step in a continued effort to reduce costs in its wireless handset business would involve reducing its global workforce by at least 7000 positions.

Motorola said that these reductions would affect all aspects of the business across all geographies because it was committed to becoming the most cost effective enterprise in the industry in order to help grow market share.

Kenwood will now concentrate on 3G product. Kenwood had been on the verge of launching product in the UK after launching some product in Belgium and Turkey. However the company concedes it struggled to get the proposition right

We had a problem playing catch-up we just couldnt get the product right for launch said Kenwood communication director Mike Atkins

There were a number of factors that affected our decision. Each time we felt that we were ready to launch the price wasnt right or the feature set wasnt right and then when these were resolved we had a problem trying to get the right volumes ready in time.

We were very close and had full intention of launching. But we just couldnt get that final push. It just goes to show how difficult it is to enter the market right now.

Its very hard to launch product in to. We feel that focusing on 3G is the right decision. I think if we had taken the risk it may have been dangerous for us as a company Atkins said.

Nevertheless Atkins says that Kenwood intends to be a serious player in 3G bolstered by its current success in the Japanese market.

Kenwood is very strong in the Japanese market. We felt that it will be better to focus on 3G because it is a world standard. By having Japanese engineers working on 3G on their own soil it will give us a chance to come in at a sensible level rather than playing catch-up. Kenwood has a significant share of the Japanese market and for to be successful we need to come from a strong base.