The Dispatch Unit’s future now under threat after estimated £600,000 commission loss
B2B and B2C dealer The Dispatch Unit (TDU) is taking legal action against EE airtime distributor Midland Distribution, alleging it was unfairly terminated by the firm last month.
The Manchester-based dealer had its account suspended by Orange without notice on October 12. Midland confirmed on October 15 the decision was made over alleged complaints made to Ofcom relating to customer service.
TDU disputed the claims and says an internal investigation revealed no complaints had been made. It said it made Midland aware of its findings.
Ofcom said it had received only a small number of complaints about TDU between July 2011 and September 2012.
A number of online forums visited by Mobile News show several TDU customers have expressed concerns over its conduct.
TDU has worked with Midland for eight years, and at the time of the termination it had a base of more than 6,000 Orange consumer and business connections.
Midland told TDU it will no longer receive any ongoing revenue share payments made from its base from the end of October – which the firm says will cost it an estimated £600,000 and will put its future under threat.
Ten employees have already been made redundant as a result of the termination, reducing total headcount to 40.
The firm expects a court date to be finalised before the end of the year.
A spokesperson said: “We’re expecting a court date to be finalised in the next five weeks, but if we’re unsuccessful in the case, we’ll lose something in the region of £600,000.
“We totally dispute the reasons we’ve been given. To say that we’re not going to be paid any more ongoing revenue is a massive blow and total unacceptable.
“Anything we have done with Orange over the years has completely dissolved. I now want nothing to do with the network whatsoever. We’re not a multinational company that can just take that on the chin. We’re a family-run business, so this will have a massive impact on us. We were relying on ongoing revenue to pay our large overheads and if we lose that, TDU could be forced to shut down.”
In the meantime, TDU says it will focus on increasing its remaining 1,000 plus connections on O2 and Three, which are put through other airtime distributors.
It says it may look to churn lost Orange customers back but will wait on the outcome of its case against Orange and Midland first. Both Midland and Orange declined to comment on the story as Mobile News went topress.
Meanwhile, TDU has settled its dispute with Shebang Technologies Group after threatening legal action against the Daventry-based company for withholding £15,000 worth of commissions.
In April, TDU told Mobile News it was owed the money for 208 Three consumer connections made between August and November 2011.
Shebang Technologies Group managing director Iain Humphrey said the commission had been withheld due to clawbacks, but he contacted TDU in August and paid back thefull amount.