Two things are driving fixed line sales within the independent mobile dealer channel.
Firstly, the message about convergence sales is getting through and serious-minded B2B dealers are looking to expand their customer propositions.
Secondly, fixed line providers have observed the recent trend within the sales channel towards revenue share payments, and have acted to draw dealers by offering familiar upfront payments.
Certainly that is the case with Carphone’s fixed line division Opal Telecom, which has teamed up with a host of traditional airtime distributors in recent months and introduced aggressive new commission payments to draw business broadband connections from the mobile dealer channel.
It is also true of Opal Telecom reseller brand V Networks, which Carphone acquired last year and incorporated into its B2B division.
V Networks resells and rebrands Opal Telecom, BT and Griffin Internet services. It claims it will also draw in mobile dealers with a hefty commercial package for sale of its fixed voice and broadband proposition.
The difference is V Networks’ remuneration scheme is effectively a bumper finder’s fee, rather than a recurring subscription commission.
V Networks operations manager Nick Shraga (pictured) says the new ‘V2’ programme, put together specifically with the mobile dealer channel in mind, sees monthly customer profits from fixed line connections shared 50/50 between V2 and mobile dealers.
After an initial term, V2 purchases dealers’ commission stream from them for an ‘exit sum’, derived from a multiple of their total revenue base and roughly equivalent to two years’ commission.
The V2 assessment period for the buy back takes place from January through March next year. V2 takes charge of all customer account management thereafter.
Although V Networks operates on a much smaller scale than Opal Telecom, it shares its parent unit’s current optimism for dealer sales.
Opal Telecom reckons it can take 10 per cent of the business broadband market. V Networks reckons it will quadruple its mobile dealer base from 19 to around 80 on the back of its V2 package.
Shraga points out the huge draw for mobile dealers: they effectively get up to three years’ commission for just one year of managing the customer.
He says the buy out settlement is a way to reduce the risk to the dealer.
“Why wouldn’t a dealer want to get three years worth of commission for only owning the customer for one? Our research shows the average end user cancels their contract after two to three years to find a better deal elsewhere, so the dealer will get paid the same amount as they usually would, but the risk of cancellation is handed over to us,” argues Shraga.
“Another problem the fixed-line voice market is facing is the increase in VoIP services, which means dealers won’t generate as much commission from customers if they begin to use VoIP services. Right now, the uptake of VoIP isn’t much of a threat so it’s the best time to enter fixed-line.”
Opal Telecom’s acquisition of fixed-line provider The Airtime Group (TAG) last month has handed V Network further initiative. TAG has been integrated into V Networks. When Mobile News interviewed Shraga in February, his stated aim was to increase V Networks’ mobile dealer base to 20 within six months.
Full article in Mobile News issue 439 (May 18, 2009).
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