O2 is set to overhaul its commission structure for B2B dealers, replacing an upfront commission system with monthly revenue share. Orange has said it will look to follow suit in the future.
Mobile News understands the new system will begin next month. O2 refused to comment, but is expected to make an announcement this week.
Distributor Redstone has highlighted in its pricing catalogue that, from October, there would be “fundamental” changes to the O2 commission structure.
The change is expected to see dealers earn more in commission in the long term, receiving commission every month a customer remains in their contract.
Some dealers have suggested the move is a result of O2 overspending on its budget for commission paid out to the dealer channel.
One dealer said: “It will be better for the network, as it will be paying out money it has already received from customer payments, rather than paying the upfront amount out of its own pocket and waiting to get it back.”
The move further strengthens O2’s desire to pay out commission based on high level ARPU and encourages the dealer channel to connect only high quality, long-term business customers.
However, with upfront payments cut, dealers said it would leave them unable to offer cashback incentives.
Smaller dealers fear they will suffer from the lack of upfront revenue, as they will potentially face months of waiting to recoup the cost of each handset.
See Mobile News magazine, out September 22, for more details