A MAJOR dispute has emerged yesterday between leading advertising agency Owens DDB and Just Mobile, the mobile phone operator backed by businessman Seán Melly which launched amid much fanfare last October.
Dublin-based Owens DDB issued a petition for the winding up of the company at the weekend.
It is understood that this was prompted by the non-payment of fees due to Owens DDB for its role in marketing Just Mobile’s launch five months ago.
The petition is slated to be heard in the High Court on March 28th, according to a legal notice that appeared in the Sunday Business Post. No comment was available from either Owens DDB or its legal representative Simon McAleese Solicitors.
Late last night, a spokesman for Just Mobile said “the matter has been resolved”.
This could not be confirmed with Owens DDB although it is known that negotiations had taken place between the sides.
It is not clear how much was owed to the advertising agency but it is understood to be a substantial sum.
A winding-up petition, under section 214 of the Companies Act, can be sought where a creditor is owed in excess of €1,270.
Just Mobile has never put a figure on the cost of its launch. But industry sources have put it at several hundred thousand euro. Much of this would have been booked through Mediaworks, a media buying division within Owens DDB.
Just Mobile was co-founded by Donal Lawless and Stuart Kelly, and was backed by Mr Melly’s investment vehicle Powerscourt Capital Partners. Mr Melly, an experienced telecoms entrepreneur, is the company’s chairman.
Stephen Brewer, a former head of Vodafone in Ireland, was a consultant to the company and has a small stake in the business.
This dispute with Owens DDB so early into its life is embarrassing for the mobile operator and could prove unhelpful in its dealings with other creditors.
Just Mobile is a virtual operator, piggybacking on Vodafone’s network. It uses the 087 prefix for new customers. No comment was available from Vodafone yesterday.
It launched with a pre-paid service in October and its aim was to lure customers with flat rates of 20 cent per minute for calls to mobiles and landlines in Ireland, and 9 cent for text messages.
Just Mobile also announced plans to donate some of the call revenue to charities selected by customers.
The company signed an agreement with wholesaler BWG to make its phones available through the Spar and Mace convenience store network. It is understood that Just Mobile is also close to signing a distribution deal with Irish-owned fuel retailer Topaz.
Accounts for the company behind Just Mobile show that it had lost about €234,000 in the six months to the end of last year.
It had shareholder funds of €1.1 million at the end of December 2009.
