2/26/2009 11:50:00 AM
O2 dismisses claims of a rift with dealers over its revenue share scheme
O2 business sales director Ben Dowd has dismissed claims that O2 is in difficulty with its direct dealers, after an anonymous letter was sent to the operator.
The letter, which was sent to O2’s senior channel managers by direct dealers, complained that its revenue share scheme (RSS) is flawed and must be scrapped.
Dowd (pictured) told Mobile: ‘We have led the market, and networks are following us with the hybrid approach. If they weren’t able to make money, they wouldn’t be with us.’
He admitted the operator had ‘had some teething problems’, but insisted ‘there are no problems now.’ Dowd added: ‘We spoke to our partners and almost all were happy about what we were trying to do.’
O2 has suggested that the complaints arose from smaller dealers, not its key direct dealers.
However, one direct dealer told Mobile: ‘There are issues with it. In an ideal world the scheme would work, but because other networks do it in different ways it is an issue. If you put O2 up against other networks, it doesn’t stack.’
The dealers complained that they were ‘unable to budget, forecast or provide an adequate new or re-sign programme for customers in fear of any expected commissions being withdrawn when the reconciliations are calculated’.
The dealer source also suggested that even O2’s direct dealers could ‘find a route to put business elsewhere’, due to unrealistic ARPU.
The letter said: ‘The fatal flaw in the RSS is the high figure placed on the ARPU, at between £40 and £50 in most cases. It is 100% the opinion of the direct dealers we have spoken to that the ARPU figure is totally overestimated, especially on tariffs involving sharers, which are the bulk of our business connections.’
Another dealer source said: ‘A lot of dealers don’t have the cash – it’s clearly flawed.’ He added: ‘Dealers can leave if they want, there are four other networks to go to.’
O2 moved to the current ongoing commission scheme, which replaced its up-front model, in October 2008.
At the time of Mobile going to press, Dowd was at a conference with dealers