Mike: Orange’s revenue share


You can’t please all of the people all of the time. With revenue share, you can’t ever please all of the people. Fact.

Orange is the third network operator to launch a revenue share scheme to the broader dealer channe – and the fourth in all, considering Vodafone’s trial model through Yes Telecom.

Orange’s is the least novel of the three launch models. It offers 90 per cent upfront commission and 10 per cent ongoing share of customer spend.

By comparison, O2’s is a total revenue share with a hardware subsidy. T-Mobile is running an 80/20 split, also in favour of a straight commission payment.

O2 has been slammed by certain parts of the dealer market for its approach – principally, the same parts of the market it is happy to circumvent.

Some T-Mobile dealers have torn their hair out over how to manage cashflow under the new model.

And Orange has been criticised in some parts for not going far enough.

As one distribution chief said, it’s doubtful that 10, even 20, per cent is enough to influence a dealer’s sales strategy to really chase long-term, higher spending customers.

And those that have been relieved Orange plans to retain 90 per cent commission, still worry this small grace could be shortlived as the commission/revenue split gradually slides towards revenue share.

T-Mobile has admitted as much, that slim revenue share only represents training wheels for a more even split.

Distributors and dealers have to grin and bear it. Or, better, they have to face facts and focus their energies on driving better value business to network paymasters.

The networks know what they want and are determined to drive better practices in the dealer channel. Dealers with any sense of proper career direction will already be on-message.