Gent gets his wires crossed

IN 1875, Alexander Graham Bell leapt out of bed with a brainstorm. He reckoned that if you gave consumers a wire connected to a device he named a telephone, and place a meter in the wire to see how many times they speak, you can send them a bill.

More than 100 years later, Sir Ernest Harrison of Racal took the brave move to snap up a licence that allowed transmission via mobile phones. Brave because it meant investing in infrastructure, the placing of antennae all over the country and a metering system to charge the punters. The result, a cash cow.

So what has changed? A board of directors went on a buying spree in a similar fashion to a Premier League football manager, that's what. When will people learn? Buying companies with paper may sound a good idea at the time, as you do not have to part with any cash. But if you pay, say, £5bn in shares for a firm worth £1bn, you are putting off the day you have to take a whack and write off the goodwill.

At Vodafone, it is payback time, the result of a wild shopping spree to attain more allegiances and ventures-than Montgomery had in the Second World War. Its annual results saw £20bn of write-downs, which resulted in a £13.5bn loss. Shareholders are sick and tired of hearing a combination of good news - billions of first-line operating profits - and bad news - write-downs.

Chief executive Sir Christopher Gent has realised it is time to give some bad news in one swipe. That is OK if you intend to settle down to the real plot of Cash Cow Plc. I fear not, as his latest gem is to hint at buying more companies, no doubt at five times more than they are worth. He is not taking any write-downs on some of the companies he has already paid over the odds for and, wait for it, there are apparently some new and exciting developments on the horizon.

He is still talking about 3G as the new saviour. It is bad enough that Chancellor Gordon Brown legged over bidders with astronomical prices for the licences. But nobody has focused on who the hell wants this new technology.

Have they not learned their lesson from WAP? When will someone tell them phones are for conversation? The boom in SMS text messaging is blinding them. They think they can take it to the next stage, watching David Beckham score a free-kick while sitting on the Tube. In your dreams.

The industry has striven to reduce the size of handsets to almost unusable dimensions and tried to defy the laws of physics to make batteries last longer. Now it wants to deliver live video and web pages to a screen not much larger than two postage stamps.

Will someone get real? It is impossible. To do all this will mean a U-turn on the nature of the device people carry. As a minimum, they will need a PDA-type device to view anything half-decent. The problem is they believe their own hype. I quite understand the brain-dead fund managers falling for this dream and piling in for more shares, but the fact is that Vodafone is merely putting off the day when the penny drops.

'I bought this 3G phone and, well, it makes calls OK but it took me 10 minutes to download my share portfolio, by which time I was home.' Those familiar with the internet know you wait ages for a page to download, so much so that broadband lines are now catching on. The public needs to know that 3G offers a data speed only about 10% faster than a steam-driven PC.

At the next fund managers' or bankers' meeting, Gent should start by playing the music to Strangers in the Night. Then, once every one is relaxed, jump up, grab the mike and burst into song.

'Ever since that time you made me buy everything in sight, we've done our brains in. Now you're blaming me, it's really not too fair. All you've ever done is cop your fee and lumber me with toot, and I'm the one to explain it all away, it's really not too fair. Bankers in the plight, the gravy train's dried up and cash is very tight, and for the funds you can go away until another day. I can tell you it's all right. I'll write it off so we can fight. We want our cash cow back and I will get it, leave me alone and simply forget the past.'

Gent, come clean on 3G and the other bad buys - the shareholders are restless. I am not sure they are ready for any more bad news. Start by waiving the balance of your bonus.

The biggest loss ever posted by a UK company and the chief executive gets a bonus. It could only happen in Britain. Unbelievable.

Sir Alan Sugar has donated his fee to charity