12/16/2008 6:21:00 PM
Dealers are braced for deeper T-Mobile upfront commission cut
Dealers anticipate T-Mobile’s new upfront percentage will reduce to as much as 50% likening it to the O2 structure.
One dealer said: ‘It seems as if they are easing us into it. We anticipate that in the future dealers will get 50% upfront, which will fluctuate when T-Mobile needs more connections.’
T-Mobile met with it indirect channel in a number of meetings to say they would be taking 20% out of upfront from April. This 20% would be redeemable at month four of a contract and would be proportional to the customer’s bill.
On the whole there has been a positive reaction from dealers to the new system. Some are pleased that it will not negatively affect their cash flow. Gokhan Yilmaz from Fonebox in Hexham, said: ‘It’s not a massive change, I think it’s a clever, 80% will be enough of the handsets and a little bit of profit and the rest of it is given after four months; it’s a lot better than I thought.’
Another dealer said: ‘The only problem is that if you don’t have a high spending customer you won’t benefit as much from the ongoing part.’
Largely dealers think the decrease in the upfront payment will only affect those who are only after the connections and are not interested in retaining the customer. A T-Mobile direct dealer said: ‘It’s fine for me as obviously I want to do the long-term business – I know I’m going to give good connections.’