3GScottishUser
10th November 2005, 05:23 PM
From Mobile Today (10/11/2005):
Retailers were caught on the hop last week when commissions on 3s most popular deals nose-dived as the network reigned back commissions in a bid to improve profitability and be more selective about its customers.
The changes are thought to have major implications for the independent channel, especially for dealers that have built their businesses around cashback deals on 3s popular Talk & Text 600 tariff.
Some people who run call centres have been in tears about it, said one northern dealer. A lot of dealers will be studying the price books from other networks very carefully.
The move comes at a time when 3 is bidding to redefine itself, heavily pushing its multimedia services to encourage higher ARPU and working to meet its break-even target for 2005. It follows 3s termination of 37 dealers for what the operator described as inferior-quality business. The changes show the network adopting a significantly different strategy compared to last year, when commissions were pushed through the roof in an aggressive bid to steal market share from other operators.
Were not pulling back from the marketplace. Our commissions remain competitive. Were directing our sales into channels that give us the most profitable business, 3 sales director Marc Allera told Mobile.
However, dealers said the commission drops had prompted a sudden move towards Orange connections instead of 3, although some said the networks improved handset portfolio justified higher prices than last year. Now that they have the Sony Ericsson, the Motorola and the Muse they want to give them a chance to stand on their own, said one senior retail source.
The changes saw margins on some deals drop by nearly 50%. Using figures from one distributor, giving away a Sony Ericsson K608i on Talk & Text 600 last month would have netted a dealer £87. In November, the same deal would give him £50. The net commission on a LG 8360 dropped from £100 to £60 on the same tariff.
If ensuring quality means a slight drop in connections then so be it. If some of these redemption schemes are reduced in value thats probably just a good thing, said Hugh Symons business manager Bob Sweetlove.
Despite less money, many dealers applauded the changes in the hope that they would help root out dishonest cashback deals and encourage higher quality connections on the network. Cashbacks are a disease that should never have been allowed to happen, one dealer said. Sometimes, to cure the illness we have to swallow a very, very bitter pill.
http://www.mobiletoday.co.uk/artman-test/publish/article_909.shtml
Retailers were caught on the hop last week when commissions on 3s most popular deals nose-dived as the network reigned back commissions in a bid to improve profitability and be more selective about its customers.
The changes are thought to have major implications for the independent channel, especially for dealers that have built their businesses around cashback deals on 3s popular Talk & Text 600 tariff.
Some people who run call centres have been in tears about it, said one northern dealer. A lot of dealers will be studying the price books from other networks very carefully.
The move comes at a time when 3 is bidding to redefine itself, heavily pushing its multimedia services to encourage higher ARPU and working to meet its break-even target for 2005. It follows 3s termination of 37 dealers for what the operator described as inferior-quality business. The changes show the network adopting a significantly different strategy compared to last year, when commissions were pushed through the roof in an aggressive bid to steal market share from other operators.
Were not pulling back from the marketplace. Our commissions remain competitive. Were directing our sales into channels that give us the most profitable business, 3 sales director Marc Allera told Mobile.
However, dealers said the commission drops had prompted a sudden move towards Orange connections instead of 3, although some said the networks improved handset portfolio justified higher prices than last year. Now that they have the Sony Ericsson, the Motorola and the Muse they want to give them a chance to stand on their own, said one senior retail source.
The changes saw margins on some deals drop by nearly 50%. Using figures from one distributor, giving away a Sony Ericsson K608i on Talk & Text 600 last month would have netted a dealer £87. In November, the same deal would give him £50. The net commission on a LG 8360 dropped from £100 to £60 on the same tariff.
If ensuring quality means a slight drop in connections then so be it. If some of these redemption schemes are reduced in value thats probably just a good thing, said Hugh Symons business manager Bob Sweetlove.
Despite less money, many dealers applauded the changes in the hope that they would help root out dishonest cashback deals and encourage higher quality connections on the network. Cashbacks are a disease that should never have been allowed to happen, one dealer said. Sometimes, to cure the illness we have to swallow a very, very bitter pill.
http://www.mobiletoday.co.uk/artman-test/publish/article_909.shtml