3/26/2009 11:41:00 AM
T-Mobile and Orange revenue share schemes will hit dealers' sales
Dealers are braced for a major dip in sales from next Wednesday (1 April) on Orange and T-Mobile, as both networks introduce their revenue share schemes on the same day.
Dealers and distributors predicted a sales dip of up to 20% as they acclimatise to the most important changes in the dealer sector for years.
Concerns involve investing money upfront for unpredictable future revenue and a widening gulf between dealers’ offers and those sold through the operators’ direct channels.
One dealer said: ‘We will have less in the pot to subsidise handsets upfront than the T-Mobile and Orange stores.’
Orange and T-Mobile sales directors, Duncan Hay and Roger Fletcher, have been preparing the ground ahead of the 1 April launch.
Orange will unveil the system for dealer commissions, with 10% in deferred ongoing commissions and 90% upfront. Meanwhile, T-Mobile is offering 80% commission upfront, and 20% deferred.
Dealers also said it would spell the end of cashback promotions, as deal seekers would go direct to operators. ‘This will shake out a lot of dealers,’ one distributor said.
O2’s revenue share scheme appears to have stabilised after an initial period of uncertainty led to a drop in dealer sales.
The schemes from T-Mobile and Orange are expected to have a bigger impact than O2’s as they both have significantly larger dealer bases, used for consumer connections as well as business.
Some distributors, such as Hugh Symons, have been trying to boost connections by offering elevated commissions. Avenir put its box bonus up to £100 at the beginning of March in a bid to attract dealers – the offer will end as revenue share comes in.