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Hi Nisavva,
I'm sorry to hear you have had the same issue. Unfortunately, I was unable to fix the problem (you can either have WiFi, or bluetooth apparently, not both!) and so I managed to sell my Umi Diamond on eBay. A smartphone that can't handle wi-fi and bluetooth at the same time isn't a smartphone in my opinion.
If you still have the phone, one thing that might help is using a 5ghz wireless network, not 2.4ghz (as this is the same frequency as bluetooth). I believe this is what's causing the issues we had. If no-one else has encountered this, then it may be we both had faulty wireless chips in our phones. I don't have much knowledge on these wi-fi/bluetooth chips, but I did read there was a possibility that the "two anteneas" are touching... although I never bothered to find out if this was the case.
Unfortunately, no-one on this forum seems to be able to understand that this issue is to do with the Wi-Fi/Bluetooth chipset and no matter how many times you flash new roms, it doesn't make any difference (7 times i tried, 7!).
Despite emailing Umi several times, they never got back to me. I did eventually settle with GearBest.com for a partial refund and to keep the useless device, but I doubt I'll be using them or any other chinese reseller ever again. I can understand where GearBest.com is coming from, but sadly here in the UK we're used to slightly better customer service than that.
For anyone reading this thread, really think about whether you want to take the risk with a new cheap chinese brand. QA is clearly of far lower importance to these companies. Or if you do buy one, get it from a reputable retailer like Amazon. At the very least make sure you use PayPal to pay! You're gonna need as much consumer protection as possible.
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