12/11/2008 11:32:00 AM
T-Mobile to hold back 20% commission from April
T-Mobile will start deferring a big part of its dealer commissions until the fourth month of a new customer contract from April 2009.
Dealers will get 80% of their commission up-front, and will have to wait to be paid a 20% slice of the customer’s total spend for the first four months.
The 20% payment directly links a dealer’s incentive to how lucrative the customer is for T-Mobile.
The move is a further sign that dealers will carry the financial responsibility of attracting customers who spend more money
on the network, and do not shift down to cheaper line rentals and default on their contracts.
The operator told its independent channel on Wednesday (3 December), about the new commission scheme, at two separate meetings in Luton and Birmingham.
Roger Fletcher, T-Mobile’s head of indirect retail, said he wanted a further shift towards a smaller up-front payment, with bigger amounts paid later in the customer’s contract.
Fletcher added: ‘There is a potential upside for people bringing in top ARPU customers, which is what we want. But anyone that brings in low-quality customers is putting at risk up to 20% of what they’re earning at the moment.
‘We’re giving people time to gear up for it and the reaction was very positive.’
In October 2008, T-Mobile dropped a massive part of its indirect business, culling 537 indirect dealers, 34 direct dealers and one distributor (Fone Logistics).
The cuts were made after an evaluation period (from May to October 2008) during which clear targets were established for T-Mobile channel partners. This included counting upgrades as connections and laying the groundwork for revenue share.
T-Mobile’s head of national sales, John Fannon, said at the time: ‘We’ve lost quite a few partners which we anticipated. We needed to see who was open for business.’
T-Mobile has been among the weaker networks in terms of financial performance, down 7% on its revenue for the third quarter after shedding 500,000 customers in the first half of this year.
Orange is understood to still be planning its revenue share commission scheme after originally telling its distributors it was going to implement the model as far back as October 2008.