How I started a New Telecoms Business
While in Bankruptcy, I had penty of time to consider my next move.
It seemed to me that the UK telecommunications industry continued to offer a good business opportunity, despite the failure of NPC. I still had the names and private contact details of the original Shareholders. I reasoned that since they knew the history of NPC, and that I had been proved correct in forecasting the demise of that company if I did not have Shareholder support, then some of them may have been prepared to give me a second chance.
Phonecard Services Ltd. (from 2002 easy-dial Ltd)
In April 1995 I formed a new UK Company – Phonecard Services Ltd – with my wife Michele and Gideon Goldschmidt ex NPC as the two initial directors: obviously I could not be a director as I was still “serving out” my time in bankruptcy.
However, I did not want to make the same mistake of relying on an independent software consultant to control the Telecoms Exchange we would be using: time had moved on and more reliable systems were available with 24/7 service contracts. There would be no need to use Telehouse or the equivalent, as the providers of the Exchange (or Switch) we would be using had their own “server facilities” and so there was no role for Gideon Goldschmidt who resigned as a director in September 1995.
The principal product and market for the new company was the same as before – a “prepaid phonecard” service, serving the tourist industry, students, and anyone else who wanted to reduce the cost of their international telephone calling. Although the Mobile phone networks had made rapid progress in 2/3 years, prices were still high and network coverage not always reliable. And the Internet was only just beginning to be a factor – it was not until 2000 or so that I had to change course and move away from the Phonecard concept. What happened to the phonecard market and how it evolved to the 21st Century Calling Account is explained in the Power Comms website at https://callingaccounts.com
Structure and Funding – Initial Capital of £25000
During the next six months I canvassed my previous NPC Shareholders and obtained support immediately from 10 former Shareholders including, of course, Charles Sayer.
Several meetings were held at the private homes of two of the Shareholders – Peter Bolt and Raymond Bridges – and the company structure and Board appointments were agreed.
The list of Initial Shareholders in the new company were:
Peter Bolt: Experienced Company Director and Chairman elect
Raymond Bridges: Entrepeneur and Finance Director elect
Charles Sayer: Director elect
John Chapman: Friend and business partner of Ray Bridges
In late September 1995, the structure of the new company was in place with £25000 of startup capital provided by the above Shareholders, and trading commenced.
Board Meetings were held on a regular basis to monitor progress and sales, and I reported to the Board of Directors. Our Accountants were Handley Roberts, a local London firm introduced by Charles Sayer.
Because I was the only “salesman” as such, and at the time solely responsible for all marketing and technical issues, I asked Jackie Peat to join the company as administrator and Customer Service Manager. At the time we were both based at home, so enquiries and customer support were dealt with by diverting calls to landlines or mobiles as required.
Company Progress – The First 5 years 1995 – 2000
After one year of trading, the company had acquired a nnumer of customers including the London Tourist Board and a number of Universties and Colleges, and had done enough in sales terms to prove it’s viability. I recommended to the Board that all previous NPC shareholders should be awarded gratis an equal number of Founder Shares in the Company as a goodwill gesture and to establish our credibility. The cost of issuing these Founder Shares was minimal, and met by the Company, but it was appreciated by many of the original NPC investors.
As a direct result of this forward thinking, over the next five years to 2001, Phonecard Services Ltd – later easy-dial Ltd – raised approximately £250,000 in additional working capital from its own shareholders by staging regular Share Issues.
Company Progress – 2000 and beyond
By 2000, the UK telecommunications market had undergone a drastic change, caused by two things: firstly the rise and rise of Mobile Networks – driven by the ever-decreasing size, cost and capability of the handsets – and secondly, the Internet, with the hugely important impact it was beginning to have on sales and marketing. There was also a third factor at work, and that was that increased competition from the new Mobile Networks – Vodafone, Orange, O2, T-Mobile to name but four – also meant that national and international call prices were falling.
The “phonecard” was no longer such a necessary product – most customers could now afford mobile phones, national call prices were reasonable, national network coverage had drastically improved and the new handsets could do a lot more than the standard phonecard.
Steps Taken To Remain in Business.
The first thing I did was to change the name of the company from Phonecard Services Ltd – which by now was giving the wrong message to new and potential customers. From 2002, the company name was changed to easy-dial Ltd, which better represented our product: I also obtained a number of domain names to establish our Brand on the Internet, which included easy-dial.com, easy-dial.co.uk and easy-voip.net.
The second step was to re-brand our lead product from a “phonecard” to a “Calling Account”. In reality, our old phonecard product used exactly the same technology, which was a VOIP based telecoms switch, and so apart from adding further access numbers to the service which were Local numbers (not Freephone numbers) we had a 21st Century product.
The third step was to set up a number of commercial websites so that we could take advantage of the Internet Revolution and tailor our new business to these websites, which would mean that from 2005 there was no real requirement for an office location where customers would actually visit. The Registered Office is now at 85 Great Portland Street London W1W 7LT.
Our new “internet presence” in turn led directly to another source of business, which was international reselling, where our customers were telecom resellers, either selling directly to their own customers or using callshop technology. We provided services to resellers in countries including the UAE, Zambia, Libya and Angola.
Today, the company remains very much in business and has a number of working sites which explain in detail the current products and services available – including https://www.easy-dial.com and https://easy-voip.co.uk
The company also has its own You Tube Video Channel – primarily provided for its customers to explain how the Calling Accounts can be best used and the features available.
I also recently built an independent website – https://callingaccounts.com – which explains how the calling account became the successor to the phonecard.
Rosedale House Serviced Office 2001 to 2005
In approximately 2001, after successfully rasing business capital, I decided that the company needed an office presence as both a Registered Office address, and a centre for Board Meetings, office administration and sales.
I chose a small but comfortable business centre in Richmond, close to the train station and with good access from the main roads leading to the M25 and Central London. This was at 2A Rosedale House, Rosedale Road – see photo.
It remained the Office for easy-dial Ltd for some years until the advance in available technology caused a re-think. Since easy-dial was by then primarily an Internet based business, with business conducted “on-line”, and this coupled with the advances in home computer capability with printing and fax facilities, meant that by 2005 there was no further justification for a physical office presence – apart from as a meeting room, and meetings could easily be organised at other venues.
The DTI Experience - A Tricky Moment
In 2002, easy-dial’s Board of Directors – which by then included myself, Charles Sayer, Garo Molozian and Susan Ward – decided to organise another round of fund raising to finance further company expansion.
This time, the list of potential investors would not be limited to our existing shareholders, but we would use the same procedure to find new investors – as had been done before in 1993/1994 with NPC and using Matrix Securities Ltd. I consulted with Charles and the legal firm that he introduced to me, who were allegedly specialists in this particular area of the Law, and to make sure that the Matrix Securities route was still “legal”. Having obtained the “green light” from both lawyer and Matrix Securities Ltd, I developed a new prospectus for easy-dial Ltd, and the mailing went out to prospective investors in late September 2002.
At first, all seemed well, and we began to receive application forms and cheques from new investors at our Richmond office. One morning in October 2002, I received a home visit from a gentleman who said he was from the DTI, and he had some enquiries about easy-dial Ltd: I refused him entry to my home, which he seemed to expect, and asked him to meet me at the Richmond Offices later – to which he agreed.
Expecting potential problems arising from our new Share Issue, I called our Directors together to an office meeting and explained the situation: shortly after this, the nice man from the DTI turned up at the offices, and started by requesting access to all our confidential information.
I called the lawyers recommended by Charles ( I forget the name of the Firm) and requested advice as to how easy-dial should deal with this request. To my surprise, I was given direct advice by the senior partner to invite the DTI man to leave the premises! I double-checked this advice on the phone, but the advice stood, and I assumed that the lawyer concerned had some knowledge of our legal rights under these circumstances. And so I explained to the nice DTI man that our lawyers had recommended that we ask him to leave!
This turned out to be a big mistake, and only incensed the DTI, which at the time was the principal regulator for UK Companies. We paid dearly for the “advice” and had to endure additional inspections and the threat of company closure in the weeks that followed. There was a fairly acrimonious “hearing” a month or so later – without our “legal advisors” – where an eventual compromise was reached whereby easy-dial had to notify all of the new Shareholders that the procedure we had used to contact them had breached certain requirements, and to offer to return any new investments in full.
Interestingly enough, only half the new investors opted for the return of their money, and Martin Sharp – one of the new Shareholders from that Issue – in 2004 became Chairman of our Board of Directors. However the experience was not a pleasant one. I assume that there had been some initial complaint from one of the “names” on the Matrix Securities list, and this led to the DTI’s involvement. Some time later, in 2012, I notice that Matrix Securities Ltd was placed into administration.
easy-dial Principal Colleagues and Personalities
Over the first 20 years, I have reason to be grateful for the support and contributions from a number of individuals, some of whom were friends and close colleagues and all of whom contributed to a greater or lesser extent to easy-dial.
Peter Bolt (Dec’d)
– Chairman and Director 1995 to 1999 and Initial Shareholder. Living in Kent, Peter was “old school” with huge charm and a good deal of experience with UK companies. He remained Chairman until he felt that the company no longer needed his services, which I much appreciated.
– Director 1995 to 1998 and Initial Shareholder. From West Sussex, Ray is a successful entrepeneur and businessman and brought a good deal of practical experience to the company. As with Peter Bolt, he remained on the Board until he felt that the company no longer needed his services, which again I much appreciated.
– Director 1995 to 2013 and Initial Shareholder. As explained before, Charles is a good friend and easy-dial’s longest serving director. He introduced me to Matrix Securities Ltd, which is where the investors were identified first for NPC and then for Phonecard Services Ltd. He recommended the Handley Roberts firm as our company Accountants. And he was also directly responsible for bringing Liam Leckie to my attention. Unfortunately, he was also responsible for recommending the firm of lawyers who put our company at risk by giving me shockingly bad advice!
– Director and Chairman 2004 to 2010. Martin was one of the newer shareholders, and brought with him huge enthusiasm and a great deal of experience, useful for a small business like easy-dial Ltd. He was an entrepeneur based in Kent, and ran an import/export business W.G.Sharp & Son which I see is still very much active. I was very grateful for his faith in easy-dial Ltd and the contributions he made in the Boardroom.
– Director from 2004 to 2010, Eric was one of our original Shareholders from 1996, and he joined the Board in 2004. He brought his experience and professionalism to the Company, and I am very grateful for his contribution.
– Customer Service and Administration 1995 to 2005 (approx). Jackie was with me at NPC and I was very glad that she agreed to join Phonecard Services Ltd. For many years, she was the friendly voice at the end of our phonelines for Customer Support, a job she did brilliantly, along with the routine company administration etc. I was very sad to see her go in approx 2005, but a better job offer had materialized for her and I urged her to take it!
– Internet Consultant and Key Company Member 1997 to 2013. Liam was undoubtedly for me our most important technical consultant and company member for many years. He not only designed and built our initial websites, and maintained the business computers, but also took over customer service duties when Jackie Peat left. He was first introduced to me in 1997 by Charles Sayer as somebody who had the requisite technical skills and knowledge we would need to be a business with a strong internet “presence”. Married to a Polish lady, and with one daughter, Liam was based at his home in Croydon, London. I would describe him as a taciturn Scot, and our business relationship had it’s “ups and downs”, but I owe him a great deal!
– Sales and Technical Consultant 2009 to 2013 My son Russ was in between jobs in 2009 and I was happy to be able to help him out! Technically very proficient, he learnt the Telecoms business quickly and was a great asset in company Sales and Marketing. I was sorry to lose him in 2013 to Ingenium IDS
Over the course of 25 years in the telecoms business, I have met a large number of people, many of whom have helped me, and some of whom I have helped. Below are some of the other colleagues who were involved to some extent with easy-dial Ltd.
– Director 2002 to 2003. Garo is a very genial guy, but for me he was a good example of when not to mix business with friendship. Garo is married to Ana, who was Michele’s business partner in the early ’80s, and her best friend, and they have three really nice boys – who are triplets. We socialised together and were good friends – I am Godfather to one of the boys, Chris Molozian, and although as I have admitted previously I am the world’s worst godfather, I am proud to see via LinkedIn how well Chris has done in business via the technology sector.
In January 2002, Garo’s world collapsed when his employer, Tiny Computers, a UK maufacturer of personal computers, went into administration. He is a qualified Chartered Accountant, and his role at Tiny was as Chief Financial Officer: we had heard privately for years previously how he loved his job there and how proud he was of his achievements and the team he controlled, and his status symbol car, a 5 Series BMW.
As Tiny’s CFO, he was of course a person of great interest to the Administrators – his bosses had covered their tracks pretty well – and so Garo was a target. As a friend, and being somewhat familiar with the unwanted attention of Regulators, I spent many hours with him reviewing statements and accompanied him as support to various meetings at the Offices of the Administrator/Liquidator Grant Thornton
Because he had no income while he was clearing his name and reputation, in May 2002 I offered him the post of Finance Director at easy-dial Ltd with a generous consultancy package. In truth, this was offered to Garo because we were friends – easy-dial Ltd did not really need a Finance Director, he had no experience in Telecoms, and in his time with easy-dial the only lasting contribution I recall is the proper preparation of our Company Accounts. He was not used to the small business environment, and once he had got over the shock from the fallout at Tiny Computers, Garo had an air of being somehow smarter than everybody else and I did not feel he appreciated what I had done for him. He was in my opinion better suited to a “proper job” in a larger organisation with a safe PAYE salary.
In June 2003 he resigned as a Director after making sure that I personally paid out on the 600,000 + Shares that I had gifted to him previously and for which he had paid nothing! Good friend? Or just opportunistic? I see from his LinkedIn profile that he is now working for his son Chris, and is involved with teaching and lecturing in Accountancy Practice – a more suitable role for Garo “I know More Than You” Molozian!
Susan Ward (Retired)
– Director 2002 to 2003. Susan was an extremely nice individual, and when I was looking for someone to head our Sales “department”, she was highly recommended by my wife Michele, who had known her previously. Somewhat against my better judgement, because Susan had no experience in Telecoms or small entrepeneurial companies, I appointed her as Sales Director in May 2002. Although she did her best, Susan was not the right person for the job, and the company’s experience with the DTI the same year I am sure did not help her confidence. She resigned as a Director in March 2003 by mutual consent.
– Company Accountants 1995 to 2002. Handley Roberts were introduced by Charles Sayer, and consisted of two partners William John Handley and Robert James Roberts. They finalised our Company accounts for many years at a very reasonable cost, and they were both awarded Founder Shares as a token of my appreication.
Mike Miles (Retired)
– Mike was a very affable character and ran a small UK telecoms business in Hertfordshire and we had some mutual business interests. I believe he retired to live in Spain. He also received a number of Founder shares in easy-dial Ltd
Boon Teck Tan
– Boon Teck was a previous customer from NWI and is a Chartered Accountant. He provided help in the early years as and when needed to help prepare our financial statements. He also received a number of Founder shares in easy-dial Ltd
Any Telecom Service Provider – as distinct from a Network Operator – needs to have working partnerships with other businesses to provide call termination i.e. connect customers with whatever phone number or service they wish to connect with.
The primary requirement for easy-dial was to be able to connect national and international calls, and this meant working partnerships with many different “call minute” providers i.e businesses operating call routes to one or multiple destinations. For reasons of competition and profitability, it was not feasible to consider the main PSTNs who would invariably charge prices for call termination that would be uncompetitive. For example, during the period when easy-dial had a large international Reseller operation, there was a need to forge relationships with a number of international providers who could offer economic calling to destinations such as India, Pakistan, Bangladesh, Sri Lanka and a number of African destinations.
For national traffic, and the local UK access numbers we required so that our customers could connect with our independent Softswitch, during the first 10 years or so from 2000, easy-dial used Citrus Telecommunications Ltd, based in Bournemouth and very ably run by Matt Langley and (at the time) Tony Franklin May. Their Telecom switch was built by DigiTalk and their technical director was the experienced Chris Spicer. We formed a good partnership, and there were a number of memorable trips to Bournemouth to discuss our early strategy, followed by the necessary relaxation offered by Bournemouth’s nightlife! As can be seen from their website link, I am happy to note that they have continued to grow and expand their operations.