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Exclusive: dealers outraged as Vodafone cuts revenue share on connections

Alex Yau
April 25, 2017

Six per cent drop comes just months after operator temporarily cut bonuses on new connections

Dealers have voiced their outrage at Vodafone reducing revenue share on connections by up to six per cent, a move that could see some lose around £40,000 a year.

Mobile News understands the decision will impact every dealer in its partner channel below the Total Communications tier, with cuts of between two to six per cent for new and renewed connections.

Affected dealers will see the share of revenue they receive from airtime drop from between 40 and 60 per cent to 34 to 54 per cent.

The operator had given partners 90 days’ notice after sending an email to all those affected at the end of last month. Dealers expressed fears to Mobile News that the cuts will have severe consequences on their overall livelihoods.

“They treat us with so much contempt, but that’s what the channel has come to expect”

Severe impact

A partner who wished to remain anonymous said: “This is really frustrating because it’s having a severe impact on my business.

“I’ll lose up to £40,000 per year because of this. I’m really angry because Vodafone hasn’t given any reason about why they’ve made the change. They keep making changes and they don’t realise how much of an effect it has.”

Another added: “This makes business really tough. It creates  real uncertainty [over] how our business will do over the next year and we might have to make a lot of changes.

“They treat us with so much contempt, but that’s what the channel has come to expect from Vodafone now. It gives us more incentive to churn connections to O2 or EE.”

These latest changes come just months after Vodafone had scrapped bonuses on all new connections for dealers until April.Incentives ranged between £30 to £150 per subscription.

“The presence of the indirect channel is extremely important as the market evolves”

Fully committed

A Vodafone spokesperson said: “Vodafone UK is fully committed to providing its partners with an effective commercial model, together with the necessary support for them to succeed.

“The presence of the indirect channel for Vodafone is extremely important as the market continues to evolve and customers are keen to ensure their chosen partner is capable of fulfilling their total communication needs, whether it is mobile, fixed or converged communications.

“Our partners play an important role on behalf of Vodafone and following the successful launch of our partner programme in January 2017, we have partners that are well- placed, with the right capability to meet customers’ needs.

“From a commercial perspective, our aim is to continually develop our offer to reflect the future direction of the industry, and ensure our partners and Vodafone remain competitive and offer good value for our customers.”

Birtwistle moves across as Freestone steps into fold

Meanwhile, Vodafone has confirmed that head of partners and alliances Nick Birtwistle has taken up a new role leading the commercial function within its UK enterprise division.

He has held that position for the past four years and has been replaced by Helen Freestone, who has been head of sales and services – critical infrastructure, for the past 12 months.

Freestone joined Vodafone in March 2014, initially as head of regional public sector. Prior to that, she spent eight years at Microsoft and held a number of senior positions, including director of public safety and national security.

Vodafone said: “We can confirm that Nick Birtwistle, who has led our Partners & Alliances business for the last four years, is now heading up the Commercial function for our UK Enterprise division.

“Helen Freestone has been appointed our new Head of Partnerships & Alliances. Helen brings a wealth of experience and insight from her senior roles within our Major Business and Public Sector teams in Vodafone, as well as from previous roles in Microsoft.”

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