News arrives from Australia that all is not well in the cellular resale business. Reseller Digicall Ltd says it is in dicussions on the future funding of its business with its network provider Vodafone Group Plc and other telephone companies. It says that a review of its subscriber base found a substantial number of uneconomic customers, and it now estimates its bad debts to be in the region of $8.7m at June 30, with only $1.6m provided for in the half year accounts to December 31 1995. In add ition, it says its estimate of unamortized deferred costs relating to uneconomic subscribers it expects to disconnect were in the region of $4m. The directors believe it is prudent to provide for this write-off in June 1996 accounts, it says, and while its remaining subscribers will represent a quality base, the disconnections will adversely impact its results for the year to June 30. It also reckons that once it has cleaned out all the dead wood, there will be no net growth in its subscriber base this quarter. Trading in the shares was halted at Digicall’s request ahead of the announcement.
