Orange last week announced its ongoing revenue share scheme, which will see dealers take a 90 per cent upfront payment, followed by a 10 per cent cut of customer spend based on ARPU in arrears each month.
Orange head of the indirect channel Duncan Hay told Mobile News the decision was made after extensive talks with key dealer and distribution partners.
The scheme will launch April 1, the same day T-Mobile launches its own version, which sees 80 per cent commission upfront and 20 per cent of revenue shared with dealers.
Hay said Orange’s revenue share model has been on the agenda for six months and all its main partners have been made aware of the new proposals.
“Our objective is to drive value, but also to drive volume and share, but we want good business,” said Hay.
“We have been in close consultation with our federation partners, to try and understand the implications of revenue share on their businesses; cash flow, how they measure their sales, measure rewards to their sales staff, how they measure their sub dealers. This reflects those conversations.
“Ten per cent isn’t radical, and we will level it at the appropriate amount in time. But we won’t change it within six months, that’s for sure. We are committed to revenue share as a commercial model going forward.”
Hay also confirmed Orange will step up its push on retention, and reduction of churn by improving its current commissions as well as including the 10 per cent revenue share.
“We will be putting more investment in retentions,” said Hay.
“We are working in partnerships with dealers and distributors to recruit customers to the Orange base and, importantly, to keep them on the Orange base – rather than continually invest in having to acquire customers on the spin.
“We are very supportive of customers being acquired by third parties, but we want enduring business. This is a route to delivering it. As long as people do that, it will pay out.”