O2 gets tough on data commissions

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O2 has threatened to cut commissions for dealers connecting customers with 40 handsets or more if they do not meet new data requirements set out by the network.

O2 announced to distributors last week that such connections must have data added on to each user as well as an average call spend per handset of £50. Dealers that do not meet these requirements face a commission cut of around £60, Mobile News understands.

The new ruling does not affect direct dealers.

An O2 spokesman said: "We have introduced new metrics specifically for our distributor channel around 40-plus handset accounts.

“This is to ensure we are comfortable with the tenure and quality of larger opportunities and can offer the best levels of care and service. This does not impact any other channels. We believe the distributor heartland is smaller opportunities and want to concentrate our efforts to succeed in this space."

Fone Logistics head of marketing Julien Parven warned that as a result dealers may sway new customers towards other networks if they could not reach O2’s new criteria.

Said Parven: "Dealers who are comfortable at pitching for larger business will cope, but we are concerned that the criteria is unrealistic. I’m not sure it’s going to have the effect O2 wants.

“Dealers will have to make the call – whether to take customers to another network rather than face a commission cut. Orange and Vodafone would be their next choices."

Another distributor said: "It is a way for to O2 to manage large third party connections, to ensure it gets quality as well as volume from the dealer channel."

One dealer source said dealers would face difficulty in generating the extra customer usage.

"It doesn’t correlate," he said. "If you look at O2’s tariffs, adding a sharer costs £12, and data is £8, and there are free unlimited O2 to O2 calls. Customers are not going to just generate an extra £30 of usage. If a company of 39 handsets want to add one more on they would have to add a whole lot of extras, and customers want to save money, not spend more. O2 is shooting its own army."

 

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