2/18/2010 12:30:00 PM
Disties battle for Orange b2b market share
Mainline and Midland Distribution's Orange b2b share has
been hit by cuts to commissions, rivals declared this week.
The claims were made in the same week that Mainline confirmed it
was making back office redundancies.
Distribution sources say Orange's overhaul of its dealer
commissions in January has created a more level playing field,
which has allowed the indirect channel to eat into Mainline and
Midland's share of Orange connections.
The operator, which part-owns both Mainline and Midland, has
traditionally given both firms favourable terms for dealing
exclusively in its connections.
However, according to sources, Orange's overhaul saw Mainline and
Midland's commissions cut from around Â£75 per connection to just
Â£40. The move narrowed the gap between Orange partners' channel
commissions and rival distributors to around Â£10-Â£15,
One source said: 'Midland and Mainline are no longer getting the
ridiculous terms they once enjoyed and are having to fight on a
similar package. Some of Mainline's key partners are no longer
delivering on numbers like they used to now that Orange has
brought the packages more in line.'
Sources said the cuts have prompted some Mainline dealers to
defect to rival distributors. 'They look at the differential and
think they might as well go to a distributor that deals with all
the networks,' said one source.
Another added: 'Now that Midland and Mainline's packages are more
in line with everyone else, their partners are easier to poach.'
Mainline insisted its redundancies move is not linked to reduced
commissions from Orange.
It said in a statement: 'We are undertaking a review of staff
utilisation across our back office functions - hence the ongoing
consultation process with four members of our team.
'We must stress that no front line staff are affected by this
development. Investing in our service to dealers remains the
It added that the review was in part due to its online dealer
account management system, iManage.
Orange declined to comment.