Crazy John's
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Crazy John's was a mobile phone
retail chain A chain store or retail chain is a retail outlet in which several locations share a brand, central management and standardized business practices. They have come to dominate the retail and dining markets and many service categories, in many pa ...
in Australia started by
Turkish Australian Turkish Australians ( tr, ) or Australian Turks ( tr, ) are Australians who have migrated from Turkey or who have Turkish ancestral origins. Turks first began to emigrate to Australia from the island of Cyprus for work in the 1940s, and the ...
businessman
John Ilhan John Ilhan (born Mustafa İlhan; 23 January 1965 – 23 October 2007) was a Turkish Australian businessman. He was the founder of Crazy John's mobile phone retail chain and, in 2003, was the richest Australian under 40 years of age. Early life ...
. Crazy John's was the largest independent phone retailer in Australia, employing more than 400 people with more than 600 retail stores. Following his death in 2007, Ilhan's wife Patricia sold her stake in the company to
Vodafone Australia Vodafone Australia is an Australian telecommunications brand providing mobile and fixed broadband services. Vodafone’s mobile network covers more than 23 million Australians, and Vodafone has commenced the rollout of its 5G mobile network. Voda ...
, now a part of
TPG Telecom TPG Telecom Limited, formerly Vodafone Hutchison Australia and renamed following the merger with TPG, is an Australian telecommunications company. It is the second largest telecommunications company listed on the Australian Securities Exchang ...
. Originally a dealer of
Telstra Mobile Telstra Group Limited is an Australian telecommunications company that builds and operates telecommunications networks and markets voice, mobile, internet access, pay television and other products and services. It is a member of the S&P/ASX 20 ...
, Crazy John's became a
Mobile Virtual Network Operator A mobile virtual network operator (MVNO) is a wireless communications services provider that does not own the wireless network infrastructure over which it provides services to its customers. An MVNO enters into a business agreement with a mobil ...
through the
Vodafone Australia Vodafone Australia is an Australian telecommunications brand providing mobile and fixed broadband services. Vodafone’s mobile network covers more than 23 million Australians, and Vodafone has commenced the rollout of its 5G mobile network. Voda ...
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, Victoria Brunswick is an inner-city suburb in Melbourne, Victoria (Australia), Victoria, Australia, north of Melbourne's Melbourne city centre, Central Business District, located within the City of Merri-bek Local government areas of Victoria, local gov ...
, in 1991. By 1998, there were fifteen store locations in
Victoria Victoria most commonly refers to: * Victoria (Australia), a state of the Commonwealth of Australia * Victoria, British Columbia, provincial capital of British Columbia, Canada * Victoria (mythology), Roman goddess of Victory * Victoria, Seychelle ...
, and the retailer was ranked in the top ten of
Telstra Telstra Group Limited is an Australian telecommunications company that builds and operates telecommunications networks and markets voice, mobile, internet access, pay television and other products and services. It is a member of the S&P/ASX 20 ...
's mobile dealers. they had 61 stores. 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. Following the death of the company's founder John Ilhan in 2007, his wife sold her 75% share of the company to Vodafone in September 2008. Approximately 200 staff became redundant.


Closure

In January 2013 Vodafone announced that it was to close up to 40 of their Crazy John's-branded stores by 20 February as part of their cost-cutting restructuring, Vodafone's parent company Hutchison Telecoms Australia having had a 131.3 million loss for the six months to 30 June 2012. The remaining 21 Crazy John's premises are to be re-branded as Vodafone Australia stores.


Telstra legal disputes and defection

Crazy John's was originally a dealer for
Telstra Mobile Telstra Group Limited is an Australian telecommunications company that builds and operates telecommunications networks and markets voice, mobile, internet access, pay television and other products and services. It is a member of the S&P/ASX 20 ...
, 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 A facsimile (from Latin ''fac simile'', "to make alike") is a copy or reproduction of an old book, manuscript, map, Old master print, art print, or other item of historical value that is as true to the original source as possible. It differs from ...
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 The Supreme Court of Victoria is the highest court in the Australian state of Victoria. Founded in 1852, it is a superior court of common law and equity, with unlimited and inherent jurisdiction within the state. The Supreme Court comprises ...
, 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 A mobile virtual network operator (MVNO) is a wireless communications services provider that does not own the wireless network infrastructure over which it provides services to its customers. An MVNO enters into a business agreement with a mobil ...
through the
Vodafone Vodafone Group Public limited company, plc () is a British Multinational corporation, multinational Telephone company, telecommunications company. Its registered office and Headquarters, global headquarters are in Newbury, Berkshire, England. It ...
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 were a sponsor of the
Collingwood Football Club The Collingwood Football Club, nicknamed the Magpies or colloquially the Pies, is a professional Australian rules football club based in Melbourne that competes in the Australian Football League (AFL), the sport's elite competition. The club w ...
. In 2003, Crazy John's bid for the naming rights to
Subiaco Oval Subiaco Oval (; nicknamed Subi) was a sports stadium in Perth, Western Australia, located in the suburb of Subiaco. It was opened in 1908 and closed in 2017 after the completion of the new Perth Stadium in Burswood. Subiaco Oval was the high ...
, in
Perth, Western Australia Perth is the capital and largest city of the Australian state of Western Australia. It is the fourth most populous city in Australia and Oceania, with a population of 2.1 million (80% of the state) living in Greater Perth in 2020. Perth is ...
, but soon lost it due to community action.


References


External links


Crazy John's
{{Australian mobile phone companies Mobile phone companies of Australia Mobile virtual network operators Vodafone Companies based in Melbourne Retail companies established in 1991 Telecommunications companies established in 1991 1991 establishments in Australia