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MoCo drops Vodafone for O2 solus contract

Mobile News
July 19, 2010

Around 2,000 Vodafone connections at stake as airtime distributor and dealer MoCo chooses O2

Kent-based distributor and dealer MoCo has signed an exclusive contract with O2, which will see it continue migration of around 5,000 connections from rival networks to O2 in the coming months, mostly from Vodafone.

MoCo has undertaken a significant transfer of its base to O2 in the past year. It has recently let distribution contracts with both Orange and Three slide for missed volume targets, as it has pursued sales for O2 at the  expense of others. It has this month also informed Vodafone it is to cease connecting to it as a direct dealer.

MoCo is responsible for around 15,000 connections via its dealer base, and manages a further 5,000 directly. Its distribution business has been focused on O2 traditionally, and almost entirely in the past 12 months. Its sales operation, a Vodafone direct dealer, has split sales between Vodafone and O2 to now. Around 2,000 lines are to be fought for.

O2 said MoCo has increased O2 sales 300 per cent in the first six months of 2010, compared with the same period last year, and compared with the ‘Approved’ partner average of 125 per cent. MoCo said its net sales increased 20 per cent in first half of 2010.

It took Anglia Telecom’s number four spot among O2 distributors for sales volumes in the first quarter, behind Avenir, Fone Logistics and HSC. It led O2’s distribution partners for churn (eight per cent, across both its units) and customer satisfaction (an 81 per cent approval rating,   scored by polling customers post-sale, against an O2 channel average of 68 per cent and O2 direct average of 69 per cent).

O2 head of SME sales David Plumb (pictured left) said: “We have worked with MoCo a very long time, and there is a lot of trust there. It is now right up there in terms of sales volumes. And it has one of the highest customer satisfaction scores anywhere. Its churn is always single digit. It is often one that introduces ideas that get adopted more widely; like its retention strategies for instance.”

Plumb said MoCo’s O2 sales have increased dramatically with implementation of its Approved scheme among its base and its work lately with O2’s Joined Up proposition and BlackBerry’s BES Express, as well as transfer of business from rival operators.

Some handover of SME accounts to MoCo has taken place, Mobile News understands. Plumb  said exclusivity will see MoCo collaborate more closely on product and tariff planning, as well as strategies to target certain vertical markets.

Plumb remarked: “Commercially, we have a very transparent system. We do not favour one over another. The more a distributor delivers, the more they earn. The biggest benefit with this kind of exclusivity is it brings partners closer to the O2 family. We look at MoCo like a direct arm within the business. And clearly because it is an exclusive relationship, we can be more open with it than with others.”

MoCo managing director Ian Robinson (pictured right) said: “It’s taken a year to manoeuvre the company into position, and also to put together the legal substance. It gives us focus, and it gives O2 complete trust in a national distributor.

“We have dropped relationships with other networks in the past 12 months in a build-up to this. Internally, our strategy has been very clear. And I suggest that it might have now caught some of the bigger distributors out a little bit.

“This has happened in a climate of consolidation – the available dealer market has gone from 3,000 to 800-odd, and distributors have for some time asked how they will survive. How many masters can you serve? We set out our game plan to grow and prosper against that backdrop.

“And actually our net sales have increased, our turnover has been steady and our profit has jumped 50 per cent. We have gone from dealing with all networks to a point where we are putting everything through just one. We have achieved incremental revenue in a market that is consolidating.

“It gives us clarity, consistency. O2 is the number one business brand. We are excited, and we are delighted to have a partner for the long term to expand and grow with, and to attract more dealers.”

MoCo is the first of O2’s Approved airtime distributors to commit 100 per cent of its sales to O2. The three-year contract goes deeper than the strategic arrangements O2 has already struck with dealer Azzurri and distributor Avenir Telecom, both of which have committed most business to O2.

Plumb said: “Our distribution is balanced. Consider all of these strategic announcements – Azzurri provides solutions across the whole of SME and corporate, Avenir provides scale and drives volume and MoCo offers high ARPU and low churn. So, solutions, scale and high quality. And all three give most, if not all,  their business to us.”

Asked if O2 might align similarly with others, Plumb remarked: “By definition, we can’t have more than a handful of strategic partners. You can’t have the same impact with multiple partners. We might consider one more strategic relationship.”

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