Crazy John's
Encyclopedia
Crazy John's is a mobile phone
retail chain
in Australia
started by late Turkish/Australian businessman John Ilhan
. Crazy John's is the largest independent phone retailer in Australia, employing more than 700 people with over 120 retail stores. Following his death, Mr Ilhan's wife Patricia sold her stake in the company to Vodafone Australia
now a part of Vodafone Hutchison Australia
. Originally a dealer of Telstra Mobile, Crazy John's is now a Mobile Virtual Network Operator
through the Vodafone
network, dealing directly with customers and offering its own competitive mobile phone deals and plans.
, in 1991. By 1998, there were fifteen store locations in Victoria
, and the retailer was ranked in the top ten of Telstra
's mobile dealers. In 2005, the Crazy John's Training College was established in partnership with Holmesglen Institute of TAFE
to provide staff with accreditation in the industry. It is company policy that all long-term employees are offered a place in the 12/24-month-long (Certificate II in retail or a diploma
in retail management) programs, and that staff should earn a nationally recognised qualification, from both Holmesglen and Crazy John's.
The name Crazy John's came about through people constantly telling Ilhan his marketing ideas were "crazy", and the name stuck. Crazy John's came to prominence when it was the first company in Australia to offer $1 mobile phones.
Crazy John's currently serves 500,000 customers across Australia.
In 2003, Telstra sent a letter by facsimile
to Crazy John's demanding payment of A$
21,283,642.61 it said was for the overpayment of trailing commissions, a percent of customers' phone bills. In the letter, Telstra hinted that, if the demand was not paid for, its contract as a Telstra dealer could be adversely affected. Crazy John's paid the $21 million, and immediately filed suit to demand it be refunded. Crazy John's claimed that Telstra's accounting system, MICA (Mobile Integrated Customer Accounts), used to bill its 8 million subscribers, was not able to provide the information required to produce an accurate bill and, therefore, support their payback demand.
Industry analysts believed that Telstra may have been wanting Crazy John's to take a cut to its trailing commission, suggesting that Telstra believed Crazy John's could not make the payment, and it might be willing to renegotiate its commission percentage in lieu. However, Crazy John's was able to make the payment, and the situation reversed: instead of financially forcing the dealer to negotiate, Telstra was in a position of being sued and required to justify its $21 million demand, which Crazy John's believed it could not do.
In May 2005, Telstra issued a second, $12 million demand, again for more alleged overpaid trailing commissions. Crazy John's applied for an injunction in the Federal Court
in Melbourne to prevent Telstra from going ahead with this second demand. This was dismissed by Justice Mark Weinberg, Crazy John's paid the amount, and rolled the figure into its original refund demand, bringing the total to $33 million.
At the same time, company founder John Ilhan announced his intention to dump Telstra in 2007 when its contract expired, and instead would buy its own airtime from a wholesale source and serve customers directly, rather than passing them on to Telstra. Ilhan said he was "fed up with Telstra's bullying" and that it "isn't competitive any longer". Telstra, on the other hand, began threatening to not renew the exclusive reseller agreement it had with Crazy John's when it ended on 1 July 2007, if didn't agree to new terms that included less commission per customer. Telstra did just that, giving the required two years notice in July 2005.
After announcing his intention to defect from Telstra at the end of its contract, Telstra created a new company, BQ Communications, to compete against Crazy John's. In affidavits lodged in the Supreme Court of Victoria
, Crazy John's claimed that Telstra was poaching Crazy John's staff to start up the company – including Bill Asermakidis, the former national sales manager – and "raping" its customer database by taking price lists and the names of customers. Telstra denied many of the claims made in the affidavits, but not the new company.
On 1 July 2007, Crazy John's made the transition towards becoming a Mobile Virtual Network Operator
through the Vodafone
network. The deal allowed Crazy John's to deal directly with mobile phone handset manufacturers and offer its own competitive mobile phone plans. Just days before the switch to Vodafone, Telstra sought a court injunction to prevent Crazy John's from using confidential information in contacting Telstra's customers to sign them up to new contracts. Crazy John's agreed to limit the amount of customer information it can use after its contract ended.
.
Crazy John's also sponsors Richmond Tigers.
In 2003, Crazy John's bid for the naming rights to Subiaco Oval
, in Perth, Western Australia
, but soon lost it due to community action.
Mobile phone
A mobile phone is a device which can make and receive telephone calls over a radio link whilst moving around a wide geographic area. It does so by connecting to a cellular network provided by a mobile network operator...
retail chain
Chain store
Chain stores are retail outlets that share a brand and central management, and usually have standardized business methods and practices. These characteristics also apply to chain restaurants and some service-oriented chain businesses. In retail, dining and many service categories, chain businesses...
in Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
started by late Turkish/Australian businessman John Ilhan
John Ilhan
John Ilhan was the founder of Crazy John's mobile phone retail chain and the richest Australian under 40 years of age in 2003. He was an Australian Muslim of Turkish origin.-Early life:...
. Crazy John's is the largest independent phone retailer in Australia, employing more than 700 people with over 120 retail stores. Following his death, Mr Ilhan's wife Patricia sold her stake in the company to Vodafone Australia
Vodafone Australia
Vodafone Australia is a mobile telephone company, a subsidiary of Vodafone Hutchison Australia. Vodafone Australia was formerly a wholly owned subsidiary of Vodafone Plc ....
now a part of Vodafone Hutchison Australia
Vodafone Hutchison Australia
Vodafone Hutchison Australia ' is a mobile telecommunications company that operates the Vodafone, '3' and Crazy John's brands in Australia...
. Originally a dealer of Telstra Mobile, Crazy John's is now a Mobile Virtual Network Operator
Mobile virtual network operator
A mobile virtual network operator is a company that provides mobile phone services but does not have its own licensed frequency allocation of radio spectrum, nor does it necessarily have all of the infrastructure required to provide mobile telephone service...
through the Vodafone
Vodafone
Vodafone Group Plc is a global telecommunications company headquartered in London, United Kingdom. It is the world's largest mobile telecommunications company measured by revenues and the world's second-largest measured by subscribers , with around 341 million proportionate subscribers as of...
network, dealing directly with customers and offering its own competitive mobile phone deals and plans.
History
Crazy John's opened its first store in Brunswick, VictoriaBrunswick, Victoria
Brunswick is a suburb in Melbourne, Victoria, Australia, 6 km north from Melbourne's central business district. Its Local Government Area is the City of Moreland...
, in 1991. By 1998, there were fifteen store locations in Victoria
Victoria (Australia)
Victoria is the second most populous state in Australia. Geographically the smallest mainland state, Victoria is bordered by New South Wales, South Australia, and Tasmania on Boundary Islet to the north, west and south respectively....
, and the retailer was ranked in the top ten of Telstra
Telstra
Telstra Corporation Limited is an Australian telecommunications and media company, building and operating telecommunications networks and marketing voice, mobile, internet access and pay television products and services....
's mobile dealers. In 2005, the Crazy John's Training College was established in partnership with Holmesglen Institute of TAFE
Holmesglen Institute of TAFE
Holmesglen Institute of Technical And Further Education is a tertiary level training institute situated in the South-Eastern suburbs of Melbourne, Australia.-History:...
to provide staff with accreditation in the industry. It is company policy that all long-term employees are offered a place in the 12/24-month-long (Certificate II in retail or a diploma
Diploma
A diploma is a certificate or deed issued by an educational institution, such as a university, that testifies that the recipient has successfully completed a particular course of study or confers an academic degree. In countries such as the United Kingdom and Australia, the word diploma refers to...
in retail management) programs, and that staff should earn a nationally recognised qualification, from both Holmesglen and Crazy John's.
The name Crazy John's came about through people constantly telling Ilhan his marketing ideas were "crazy", and the name stuck. Crazy John's came to prominence when it was the first company in Australia to offer $1 mobile phones.
Crazy John's currently serves 500,000 customers across Australia.
Telstra legal disputes and defection
Crazy John's was originally a dealer for Telstra Mobile, Australia's largest mobile telecommunications provider, with 900,000 customers providing close to 10 percent of Telstra's mobile revenue.In 2003, Telstra sent a letter by facsimile
Facsimile
A facsimile is a copy or reproduction of an old book, manuscript, map, art print, or other item of historical value that is as true to the original source as possible. It differs from other forms of reproduction by attempting to replicate the source as accurately as possible in terms of scale,...
to Crazy John's demanding payment of A$
Australian dollar
The Australian dollar is the currency of the Commonwealth of Australia, including Christmas Island, Cocos Islands, and Norfolk Island, as well as the independent Pacific Island states of Kiribati, Nauru and Tuvalu...
21,283,642.61 it said was for the overpayment of trailing commissions, a percent of customers' phone bills. In the letter, Telstra hinted that, if the demand was not paid for, its contract as a Telstra dealer could be adversely affected. Crazy John's paid the $21 million, and immediately filed suit to demand it be refunded. Crazy John's claimed that Telstra's accounting system, MICA (Mobile Integrated Customer Accounts), used to bill its 8 million subscribers, was not able to provide the information required to produce an accurate bill and, therefore, support their payback demand.
Industry analysts believed that Telstra may have been wanting Crazy John's to take a cut to its trailing commission, suggesting that Telstra believed Crazy John's could not make the payment, and it might be willing to renegotiate its commission percentage in lieu. However, Crazy John's was able to make the payment, and the situation reversed: instead of financially forcing the dealer to negotiate, Telstra was in a position of being sued and required to justify its $21 million demand, which Crazy John's believed it could not do.
In May 2005, Telstra issued a second, $12 million demand, again for more alleged overpaid trailing commissions. Crazy John's applied for an injunction in the Federal Court
Federal Court of Australia
The Federal Court of Australia is an Australian superior court of record which has jurisdiction to deal with most civil disputes governed by federal law , along with some summary criminal matters. Cases are heard at first instance by single Judges...
in Melbourne to prevent Telstra from going ahead with this second demand. This was dismissed by Justice Mark Weinberg, Crazy John's paid the amount, and rolled the figure into its original refund demand, bringing the total to $33 million.
At the same time, company founder John Ilhan announced his intention to dump Telstra in 2007 when its contract expired, and instead would buy its own airtime from a wholesale source and serve customers directly, rather than passing them on to Telstra. Ilhan said he was "fed up with Telstra's bullying" and that it "isn't competitive any longer". Telstra, on the other hand, began threatening to not renew the exclusive reseller agreement it had with Crazy John's when it ended on 1 July 2007, if didn't agree to new terms that included less commission per customer. Telstra did just that, giving the required two years notice in July 2005.
After announcing his intention to defect from Telstra at the end of its contract, Telstra created a new company, BQ Communications, to compete against Crazy John's. In affidavits lodged in the Supreme Court of Victoria
Supreme Court of Victoria
The Supreme Court of Victoria is the superior court for the State of Victoria, Australia. It was founded in 1852, and is a superior court of common law and equity, with unlimited jurisdiction within the state...
, Crazy John's claimed that Telstra was poaching Crazy John's staff to start up the company – including Bill Asermakidis, the former national sales manager – and "raping" its customer database by taking price lists and the names of customers. Telstra denied many of the claims made in the affidavits, but not the new company.
On 1 July 2007, Crazy John's made the transition towards becoming a Mobile Virtual Network Operator
Mobile virtual network operator
A mobile virtual network operator is a company that provides mobile phone services but does not have its own licensed frequency allocation of radio spectrum, nor does it necessarily have all of the infrastructure required to provide mobile telephone service...
through the Vodafone
Vodafone
Vodafone Group Plc is a global telecommunications company headquartered in London, United Kingdom. It is the world's largest mobile telecommunications company measured by revenues and the world's second-largest measured by subscribers , with around 341 million proportionate subscribers as of...
network. The deal allowed Crazy John's to deal directly with mobile phone handset manufacturers and offer its own competitive mobile phone plans. Just days before the switch to Vodafone, Telstra sought a court injunction to prevent Crazy John's from using confidential information in contacting Telstra's customers to sign them up to new contracts. Crazy John's agreed to limit the amount of customer information it can use after its contract ended.
Marketing and sponsorship
Crazy John's is the major sponsor of the Collingwood VFL Football ClubCollingwood VFL Football Club
Collingwood Football Club VFL team, nicknamed The Magpies and often referred to as the Collingwood Reseves, is an Australian rules football team which plays in the Victorian Football League...
.
Crazy John's also sponsors Richmond Tigers.
In 2003, Crazy John's bid for the naming rights to Subiaco Oval
Subiaco Oval
Subiaco Oval , known colloquially as Subi, is the highest capacity sports stadium in Perth, Western Australia...
, in Perth, Western Australia
Perth, Western Australia
Perth is the capital and largest city of the Australian state of Western Australia and the fourth most populous city in Australia. The Perth metropolitan area has an estimated population of almost 1,700,000....
, but soon lost it due to community action.