O2 and Orange are approaching Vodafone direct dealers to switch allegiance amid claims new Vodafone business tariffs are uncompetitive for customers and unrewarding for connectors.
Vodafone refreshed its business tariffs last week (June 1), scrapping its popular Total Business packages for new Business Choice plans, which dealers claim are 20-30 per cent higher in cost for clients.
The number of permitted sharers on business plans has been reduced, forcing clients to take higher-value contracts. Voice and data tariffs have increased from £19.50 per month to £25 per month, available at the old price for 12 months.
Vodafone dealers claimed existing customers will see bills jump 20-30 per cent with Business Choice, mandatory for upgrades and mid-term resigns from July 1 also. One said: “We can’t compete for new business and, from July 1, will no longer be able to retain existing clients.”
Dealers are also angry at reduced commission rates, which run contrary to Vodafone’s claims to freeze commissions for the quarter, said dealers. Its latest commission book went live April 1.
But on May 1 commission for Band B customers (£20-£25 ARPU) upgrading mid-term was cut from £70 per line to zero on two-year deals. Dealers claim Band B customers represent a “substantial” proportion of their bases, popular among haulage and construction firms for instance, with large numbers of staff but little data interest.
Vodafone has said it will honour commission for customers already quoted a deal. “There was no warning. They cut all subsidy half way through the quarter. Some will switch providers. A lot of trust has been lost,” said a Yes Telecom dealer.
A Vodafone spokesperson said: “We’re offering customers price plans that reflect the way SMEs use their mobile whilst offering flexibility, value and cost control. Business Choice offers just that – shared minutes and the flexibility to mix and match data, email, text and voice.
“Customers can get the right combination for their business needs. We worked closely with partners before introducing Business Choice and explained the changes in detail. We’re confident from their response it offers customers good value for how they use their mobile.”
Dealers claim to have been approached by O2 and Orange to churn customers in light of Vodafone’s move on business tariffs. Several claimed O2 has already mooted 12-month buy-out packages so dealers can churn Vodafone customers with up to a year of their contract to run.
“O2 has seen ta fantastic opportunity. It has spoken to us and a number of others. And some are contacting O2 and Orange themselves,” remarked one dealer.
An O2 spokesperson said: “We are always talking to dealers about how to work more closely to create stronger partnerships.”
Orange refused to comment.