Vodafone has put its relationship with newsagents under pressure by cutting £1.2m from prepay top-up commissions, making it the lowest paying network.
The National Federation of Retail Newsagents (NFRN), which represents the interests of 18,000 independent newsagents and convenience stores, has condemned the network’s 1% cut to top-up commissions, claiming it will cost each of its members £100 per year.
Vodafone claims that the cuts are needed to support its strategy of driving growth of non-voice and text revenue.However, the national president of the NFRN, Naresh Purohit, said: ‘We believe that the widespread availability of top-up facilities through the independent convenience sector has made a major contribution to the success and profitability of the pay-as-you-go market.
‘We deplore this action by Vodafone and are particularly disturbed that they should have done so unilaterally and without consultation.’
A spokeswoman for the NFRN said that O2, T-Mobile, Orange and Virgin Mobile offer terms of between 4% and 5%, whereas Vodafone is now offering terms of between 3% and 4%, depending on the retailer’s contract.
She added that the cuts would cost the 12,000 members of the NFRN who sell etop-ups £100 per year, saving Vodafone £1.2m.
Vodafone defended the decision, claiming that the cuts would ultimately benefit newsagents.
Vodafone’s head of channel partnerships, Nick Birtwistle (pictured), said: ‘I would appeal to newsagents that it is part of our strategy to get more usage away from voice and text. In the long term, it will increase their footfall.
‘We’ve had to look at our costs, and this is just one of those things that we’ve had to do to deliver on that strategy.’
Birtwistle added: ‘Last week we announced that there would not be another rate cut for two years.’