MaryLou: O2 Ireland franchise scheme

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On the one hand, O2 Ireland is alienating half its dealer base. On the other, it is promising the rest of them the world for signing up to its new franchise scheme. Which is, naturally, fraught with risk. Because the ‘world’ is a big promise.

But such frictions go with the territory. It is making a decisive move in the Irish market, as O2 did in 2007 with its franchise scheme in the UK and Orange is doing with Go Mobile stores now.

O2 Ireland’s ultimatum is harsher. But it is a less convoluted market, and a calculated gamble: what it will lose by severing ties with 360-odd stockists (40 significant dealers and 320 minor retail concerns), it will gain from a pure supply from stronger sources. That is the theory.

But £88,000 sounds like a lot. Why should a dealer pay out such a sum (four times typical annual rent on a shop) to rebrand and restock.
Dealers have spent whole career-times building up reputations in their local markets, which O2 will ride the coattails of in franchising.

Surely that sum should be significantly less.

But the move to reshape the market is understandable, even if O2 will make some enemies along the way.

 

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