The bottom line is that this forthcoming year we will be opening more stores than we will be closing said managing director Nick Wood.

It is about managing our product portfolio and with certain stores it makes sense to close them and open elsewhere because of specific circumstances such as tenancy agreements. (cont P2)

Wood insisted that the two stores that were set to close in Port Talbot Wales and Staples Corner London did not indicate a change in direction for the retailer.

The Staples Corner store will be replaced by another store in the same retail park. At the moment the store is only a store-within-a-store in a large PC World unit. It wants the space back and we plan to open a stand-alone unit in the same location.

Wood insisted there would be no job losses and said staff from closed stores would be relocated in surrounding stores. He added that a few other stores would close but refused to give a number or name the stores.

Where we do have plans to close it will be because of store resizing he said. Last year we closed our presence on Regent Street London but then we opened one in Oxford Street. It really depends on the deal with the landlords. We have already announced that we are opening a new store in the Birmingham Bullring shopping centre and we are looking at numerous other sites.

The Link recently opened four business centres in London as it implemented its The Link Business offering. The centres were in Basildon Lewisham Hammersmith and Oxford Street and will join existing centres in Liverpool Manchester Leeds and Birmingham. They designed to attract and look after small and medium-sized enterprises (SMEs).

He said: Emotionally and contractually a deal with Vodafone has been struck.

It will take time for due diligence and legalities to be completed and no doubt there will be some tough negotiations over the small print from Caudwell. When the dust settles Vodafone will pay between 300 million and 400 million.

Phil Dobson is one of John Caudwells most trusted finance men. He has spent time at 20:20 and in the Discovery Store parts of the business and now resides at Singlepoint.

Hes there for a purpose which could well be devising the least expensive exit for John as far as his tax bill is concerned.

In some ways a deal will be good for the Caudwell Group but it will lose a vital arm. So we are probably looking at a new strategy for the Caudwell empire. Until now the Group has prided itself as being involved in every aspect of the business: retail accessories distribution and service provision. That will no longer be the case. The question is whether or not the price Vodafone agrees to pay is enough to compensate for the loss of an important arm.

However a note of caution has been sounded by an ex-senior Caudwell Group executive – Yes Telecom MD Keith Curran.

Nobody knows for sure whether Singlepoint is even for sale never mind whether a deal is being done. I have received categorical denials from senior people at both the network and Singlepoint that a deal is not even being discussed said Curran.

Curran also doubted (cont P2) whether Vodafone is on a mission to buy up every remaining independent service provicer.

I dont think Vodafone particularly wanted to buy Cellular Operations. I think the network bought Cellular Operations out of financial necessity. I dont agree with those who say Vodafone is hell bent on owning every one of its customers lock stock and barrel.

I think it only steps in when it sees that an SP can no longer support its customer and make the payments to Vodafone that the network demands. It buys SPs to protect its interests; its not part of an overall strategy. If I were Vodafone I would do the same said Curran.

When or if the deal does go ahead it will be interesting to see whether the Caudwell Group keeps hold of Phones 4U Corporate which currently connects through Singlepoint. 4U Corporates network independence is one of its perceived strengths in the highly-competitive corporate marketplace. It remains to be seen whether 4U Corporate will come under Vodafone and forfeit that independence.

Ridge claims the action was taken because PNC failed to pay him under the terms of his employment contract forcing him to leave the company last year.

Ridge is still vehemently defending action by PNC Telecom which is suing him over allegations of financial misconduct.

Ridge is accused of spending over 400000 of company money without board authority on payments to non-PNC Telecom staff.

He is also accused of purchasing stock from his wifes jewellery business raising the salary of his former KJC partner Joseph Case and other transactions involving family members.

Ridges solicitor claimed the charges were a ploy by PNC Telecom to avoid having to pay Ridge out under the terms of his contract.

In the meantime PNC had goods worth 1304.17 seized from two KJC mobile phone stores a fortnight ago. The action was carried out by bailiffs acting on behalf of (cont P2) Ridge and his former KJC partner Joe Case who own some KJC premises.

Bailiffs were sent to recover goods worth 783.11 and 521.06 at KJC premises in Lee-on-Solent only a month after bailiffs had also seized 17000 from KJC premises for unpaid rents to Ridge and Case.

This latest action was taken because KJCs parent company PNC Telecom refused to pay bailiffs costs for the previous action.

PNC has been refusing to pay rents on premises owened by Ridge.

Case is pursuing his own action against PNC and is claiming 2 million for alleged unfair dismissal harassment victimisation and breach of contract (Mobile News March 10). He alleges PNC is in breach of contract because no consultation or attempt to find him employment within PNC took place before taking the decision to make him redundant.

She has been remanded in custody at Highpoint prison while awaiting sentence. Date for sentencing has not yet been fixed.

Westbrook (39) from Welwyn Garden City was employed as a bookkeeper at X Art from November 2001 to July 2002.

Westbrook was formally charged by police with theft by employee and forgery in November last year.

She was due to have appeared in court that month. X Art went bust because of the 50000 embezzlement and a 50000 debt by failed accessory company Blue-I.

X Art discovered financial irregularities a day after Westbrook left the company. A cheque payable to the Inland Revenue for 20000 bounced due to insufficient funds.

X Arts former managing director Simon Templeman was unsurprised at the news of Westbrooks plea.

Im not surprised she pleaded guilty. She was caught red-handed. However the courts see fit to deal with her will be appropriate.

Her actions have caused the loss of the company and peoples jobs.

Hassan Khan a former Custom & Excise senior lawyer now at law firm Baker & McKenzies said:

This legislation might not be compatible with European law. European VAT directives entitle you to input tax refund. The new UK measures say Customs can now refuse to pay an input tax refund if it suspects you of dealing knowingly with a missing trader.

Under the new laws a company will have to prove it made all possible checks on the missing trader including checking the validity of a VAT number before paying VAT.

The new laws hinge on whether companies know or have reasonable grounds to suspect that VAT might go missing based on the purchase price of goods.

The new measures introduced to tackle the problems of VAT fraud centre around evidence of input tax deduction joint and several liability and extended security powers.

The effect is that companies will be forced to make more (Cont P2) thorough checks on businesses they trade with or face the prospect of becoming jointly liable for any unpaid or missing VAT.

Confusion over new laws to tackle missing trader VAT fraud has dramatically slowed handset trading said some distributors. Phones International head of distribution John McFarnon and European Telecom finance director Jim Mann agreed that trading had slowed down since the introduction of new measures by Customs on April 10.

There has been a slowdown in handset trading confirmed McFarnon.

The new measures are confusing. People are holding back to try and understand the new laws and how it will affect them. If you are buying directly from a manufacturer then the new laws shouldnt be a problem. Outside that the new laws are unclear.

Mann said European Telecom had not been directly affected but said that he had also noticed a slowdown in handset trading.

(full story P28)

But although Vodafone is trumpeting the new price plans as putting the customer at the centre there are several stealthy price hikes.

For example Vodafone customers who have used up their free minutes will now pay a minimum call charge of 5p up from 1p even if their call only lasts a split-second.

Currently Vodafone only charges 1p minimum the same as O2. T-Mobile charges 2p minimum.

The new plans will apply to new customers and any current Vodafone customers who want to change their calling plan. Current Vodafone tariffs will not be available to new customers.

Existing tariffs such as Vodafone 200 and Leisure 500 go replaced by Anytime Daytime or Evening and Weekend packages. The customer chooses the number of minutes and their package determines the time of day the free minutes can be used.

The cost of the tariff determines the number of free minutes they get. The Evening and Weekend choice only offers 300 minutes for 20.

Anytime and Daytime customers can choose bundles of up to 1000 minutes. Anytime starts at 15 for 30 minutes rising to 75 for 1000 minutes. Daytime prices range from 14 for basic line rental to 50 for 1000 minutes.

The prices of text picture and data depends on the tariff selected. Users can purchase extra add-on bundles for either 3 9 or 18 to pay for their texting data and picture messaging. But users get a free (Cont P2) allowance worth 2 a month for data calls excluding text messages.

Calls to other networks on Anytime and Daytime are included in the free minutes. Changes from one price plan to another are free.

Vodafone has promised dealers will get full training on the new tariffs.

Vodafone claims the new price plans are the result of significant investment in customer research. It says the new plans will make dealers sales migration and customer service processes easier.

It looks as if Vodafones introduction of a 5p minimum call charge is an attempt to significantly increase its revenue. It is doing so in a quiet way in the hope people wont notice said an independent dealer from the south coast who declined to be named.

If the other networks dont follow Vodafone could have a real problem. What it is planning is completely alien to our industry. Even fixed-line operators generally dont levy a minimum call charge. This is a back-door price increase which may well backfire on it especially if the other networks dont play ball. Theres no sign that rivals are set to introduce anything similar. It might be sophisticated from an accountants point of view. But it will have a negative impact on dealers and customers.

The impact may well be designed to be soft because customers can stay with their existing tariff until they change. The problem for us is we review all of our customers every three months. We invariably recommend a more appropriate tariff. It will be difficult to recommend this new plan to our customers when it is disadvantageous.

Digital Phone Company area manager Dominic Guys main concern was business users. He is particularly interested in what will happen to users on existing tariffs of more than 1000 minutes.

We have raised concerns about this. It might be that Vodafone keeps the existing tariffs in place for the high user he said.

The Daytime tariff will be welcomed by the business community. They often complain about staff using free minutes outside the working day. With Daytime businesses can relax. They will know that if staff use their phones outside working hours they will be paying for the personal calls.

MoCo Cell Link managing director Ian Robinson predicts that the new tariff will encourage customers to spend more.

Our experience with Orange shows that a system which charges slightly more but includes extra free minutes guarantees us a higher commission than selling a cheaper package without free minutes and relying on the customer making more calls for us to get commission.

We are in litigation with O2 over several breaches of contract said One Mobile general business manager Alexandra Smith.

We served notice to produce strict certified accounts in court last Friday which O2 ignored. We are now pressing ahead with further legal action.

Smith claims O2 has failed to provide One Mobile with invoices and call billing data dating back to December 2001.

We were granted a limited O2 service provider licence under an arrangement where O2 billed customers on behalf of us. We were to receive payments for connecting customers to the O2 networks and ongoing call revenue on the basis of customer call spend.

Smith says O2 made payments but never sent any paperwork to explain what they related to.

We have been chasing O2 for 18 months trying to get them to send us the correct paperwork as set out in our service provider agreement. In the last two months O2 slowed down payments claiming we owed them money.

We dont dispute this but we cant agree with it without seeing the paperwork. O2 is supposed to provide us with the call billing data on the fifth day of the month. We have never seen it. O2 has used bullying tactics against us. We have evidence to prove O2 is telling our customers that we are going out of business claims Smith.

She says One Mobile has emails and other paperwork to prove it has been chasing O2 for months for its customer accounts.

We are not going out of business. We intend to fight O2 right down to the wire. We have made Oftel aware of O2s actions said Smith.

Vodafone caused the collapse of Glasgow distributor The Wright Distribution because it mistakenly sent messages to Wrights customers that the company had gone bust.

So says a liquidators report into the collapse of Wright with 92000 debts. Liquidator William Duncan & Co stated:

The following reasons for the liquidation of their company were provided by the directors. Increased competition from other phone companies Loss of customers as a result of errors by Vodafone.

Apparently Vodafone had some months ago sent a message to all customers of Wright Distribution Company Ltd advising that the company had ceased trading.

Mr (Ian) Wright immediately contacted Vodafone and they sent a second message retracting the first. Mr Wright advised that by the time customers had received the second message the damage had been done and many had secured alternative contracts. Mr Wright claims to have had continual problems with Vodafone and tried unsuccessfully to remedy this.

European Telecom was the biggest industry creditor losing 6531. Other creditors included Fone Logistics Unique Distribution Vanguard Data Select Vodafone Connect and Phone Fit.

Vodafone declined to comment.

The devices were set for shipping when the fault was discovered. The rest of the batch was then tested to ensure it didnt suffer from the same fault before being shipped out.

Several dealers say they suffered delays in orders of P800s. Orange Direct told customers there (Cont P2) had been software problems and that the phones had been recalled. But an Orange spokesperson said there had been no such problems and that there had been no delay in the distribution of the handsets.

Orange did admit that there had been a problem with the adult content home page but that the network had sorted it out.

Orange operates an extensive quality assurance process to ensure that all handsets are thoroughly tested before they are sent out to retail channels. During one of the standard checks the Web browser on a small number of P800 phones incorrectly linked through to a web page featuring adult content when the Orange Homepage was selected. The issue was specific to two phones in one batch of handsets. The problem was identified and resolved before handsets were sent to customers. The issue did not affect availability.

The spokesperson couldnt comment on whether this had been a deliberate mistake made by an Orange employee.

The new service is called Active and offers users a selection of downloads ringtones screensavers and entertainment services. The network described it as a new fun colourful simple way to access a great range of O2 services and unsurprisingly the icon-based service looks very similar to Vodafones live! and T-Mobiles T-Zone services.

According to Driver the services are the most intuitive on the market and he claimed that if (Cont P2) dealers can demonstrate the services to customers they will see a rise in their ongoing commission and retention rates.

There is no additional charge for the Active service with MMS ringtones games and WAP browsing all remaining at their existing prices. As part of the June 1 launch new O2 customers will receive 25 free MMS messages one free colour game one free ringtone one free MMS alert and one MMS download all to be used within the first month.

Supporting the launch of the services has been a massive training programme with high street multiples as well as the independent channel receiving training on the new services.The network has also tried to ensure all dealers have demonstration SIM cards and handsets.

The Active service will be available across five handsets on launch. These are Nokias 3510i 3650 and 7650 Samsungs V200 and Motorolas T720. The Active settings for the first four handsets can be configured through the O2 website while the Motorola needs manual configuration.

Ring tones will cost up to 1.50 to download. Games are between 1.50 and 2.50. WAP access comes out of inclusive minutes then 10p a minute . MMS images will cost up to 1.50 to download.

In addition all handsets that come through the O2 distribution centre will be pre-configured to run the services. Driver says O2 will be aiming to ensure that all new MMS handsets that are launched after June 1 will be pre-configured to feature Active while new settings will be created for existing MMS handsets.

Any O2 customer who already has one of the five handsets but doesnt have access to the Internet can go to the store where it was bought or to any O2 store to have it configured.

Driver continued: The aim of the training is that staff members can configure and demonstrate the services available. We will be running more training courses as and when they are needed but our team have been flat out for the past three weeks and we are confident we have reached a large percentage of the channel. The aim is to encourage dealers to download the site and show customers how to use the services.

We have seen that customers will use the services. It is just a matter of removing the barriers that currently exist. If there is any complexity in the services then people are put off. We hope to address that.

There are bound to be similarities between our services and the ones out on the market because there is a great demand for things like gossip and ringtones. But we will be offering slightly different content. Our games will be different and of course we will have Big Brother-related services. More importantly we will be doing it in a way that is the most straightforward.

Active will be backed by a significant television print and poster campaign as well as point of sale material in stores.

The case was brought by Bond House Systems Limited which was protesting disallowance of a VAT repayment for May 2002. Customs claimed the VAT claim was based on transactions not amounting to economic activity.

Customs contended the goods were repeatedly traded within a group of companies without being sold to an end user Thus it was argued there was no true economic purpose to the transactions.

Customs further contended that the transactions formed part of a carousel or missing trader scam although Bond House Systems was not alleged to be a knowing participant.

Customs argued the repayment claim being made by the company was invalid as the sums it was reclaiming were not VAT.

The Tribunal accepted both the legal and evidential (Cont P2) issues and Customs won on 26 of the 27 evidential points and was awarded costs.

A Customs spokesperson said:

This decision confirms Customs entitlement to deny repayment claims where the transactions do not amount to economic activity.

The tribunal agreed that Customs was right to disallow the majority of a repayment claim where a chain of transactions had occurred which did not in reality involve taxable supplies.

This is a useful precedent for any future cases and in particular in cases involving computer chips and mobile telephones.