Two years on: Industry accepts revenue share

Two years on: Industry accepts revenue share

Revenue share has created long-term partnerships and changed the industry, those involved told Mobiletwo years after the model was first launched.

When revenue share was first introduced by O2 in October 2008, the network faced a backlash from dealers, with some saying that the model was introduced too quickly.

However, sources now suggest that most partners have accepted that revenue share is inevitable.

One distributor said: ‘The market has settled down now and dealers know what to expect and how the system works.’

MoCo MD Ian Robinson said that the move to revenue share was ‘inevitable’,

adding: ‘From a common sense point of view, revenue share has to make sense.

The amount paid out had to be linked to the amount a customer spends and especially as we move towards total communications.’

O2 head of SME sales David Plumb said the introduction of revenue share has changed the industry and created a policy of attracting and retaining high quality customers.

He said: ‘Customers have started to be educated by the industry about the true cost of devices. We believe this has provided a long-term, sustainable basis for the b2b partner community, which is being built on a desire to grow customer revenues and refresh devices based on need.’

Meanwhile, distributors have started to fine tune the offers they are able to provide dealers. At the beginning of October, HSC changed its O2 revenue share offer. Dealers will receive the full 24 month or 36 month upfront revenue share as well as 40% of customers’ overspend from the first month of the contract.

HSC business manager Bob Sweetlove said: ‘It is a cleaner and simpler model for the dealers to manage.

The changes have come from the dealers. A lot of dealers will have re-signs now because customers are coming to the end of their 24 month contracts.’

Written by Mobile Today
Mobile Today

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