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Britain's Truphone wins backing from Roman Abramovich

Frustrated by the lack of mobile phone coverage at his home on a farm in Kent, inventor James Tagg decided he could improve matters by getting into the mobile business himself.

First, he launched Software Cellular Network, an early version of Skype, which allowed customers with poor mobile coverage to make calls over a wireless internet connection. Then, he invented a mobile phone sim card which allows users to operate different phone numbers from a single chip, before expanding the system into a cut price mobile network.

British inventor James Tagg tells Katherine Rushton of the telegraph  about the £60m cash boost from Roman Abramovich which gave him an "inner smile".

PA Chelsea football Club OwnerPhoto: PA Chelsea Football Club owner Roman Abramovich has invested £60m in Mr Tagg’s mobile network Truphone

Although Mr Tagg said he had thought the patent for the sim card was “quite cool”, he worried that it could equally have been “20 pages of junk” until he got the business, now called Truphone, up and running. “I imagined it could end up like this, with hundreds of staff and offices all over the world but I didn’t really believe it until we got to this point.”

Yesterday, Mr Tagg’s inventiveness over the last decade was rewarded with the backing of Russian billionaire, and Chelsea Football Club owner, Roman Abramovich. The oligarch has invested £60m in Mr Tagg’s mobile network Truphone in exchange for a 20pc stake, money which the British inventor now plans to use to expand internationally and go on a hiring spree in the UK.

Although rival reports claim Roman invested £70 Million for a 23.3% stake, but Hey-Ho £10 Million might have been spent on lunch.

James continued “I’m a techy engineer so I don’t do all the touchy feely stuff but this certainly gives me an inner smile,” when reported in The Daily Telegraph. “It is a big thing - a real 'yeah’ moment”.

At the moment Truphone operates in the UK, Australia and America, but it will expand into Poland, Germany, the Netherlands and Hong Kong following Mr Abramovich’s cash injection, which was part of a £75m funding round. The business expects to double its staff over the next 18 months from 480 to more than 1000, half of which will be based in London.

Chief executive Steve Robertson said it was the story of a “British inventor done good”. “This is a genuinely British company that is going global. Ultimately we want to operate worlwide,” he said.

Mr Abramovich’s investment values Truphone at around £300m. However, Mr Tagg, who remains chief technology officer of Truphone, will only become a few million pounds richer as a result of the deal because he has previously sold most of his stake to raise funds. Alexander Abramov, another oligarch and chairman of Russia’s largest steel producer, EvrazHolding, owns the majority of the business.

Mr Robertson said this was not the case of a British firm “selling to the Russians” but about securing the right “quality of investors who really believe in the business”. Truphone operates by piggybacking off the networks of mobile operators in each country, and using its own network to link them together. As the company expands its global footprints, Truphone will not need to invest as much into the networks linking territories, bringing down the cost per user.