The speed and size of the cut has wrong-footed dealers. Many have lost business or been unable to honour deals they promised in April.
Jez Harris dealer and founder of the Phone Dealer Forum lost £1345 on his expected payment on a deal because it went through on May 1 instead of at the end of April.
Harris signed 18 handsets on a Business Plan 5000 tariff. Commission on the tariff went from £2575 down to £2060. Handset commissions for each sharer handset on the tariff went down from £215 to £169.
"When it launched the Business 1 plan T-Mobile commissions were favourable now they are lower than Orange" he said. "The only logical reason is to stem the flow of connections. It has proved successful maybe too successful."
Rebal Elayan of Business Print Communications in Staffordshire said: "It is infuriating. We had one contract that would have made a big difference if it had gone through at the end of April. It leaves us way off our expected margin."
Faisal Sheikh of Fone Doctors in London said: "I had signed a customer to a Business 1 plan. He could not make it in to the store on the Friday to complete the contract and with pricing arriving so late we didnt have time to chase him up.
"It meant I couldnt offer the customer the same deal. He wasnt very happy. T-Mobile should never have gone so high with its commissions if it was going to cut back like that. A 20 per cent cut is too much and too sudden."
A T-Mobile spokesperson said: "A higher commission was offered as a promotion to the dealer to support the launch of the tariff. This period of promotion is now over and therefore the commission rates have been reduced."
See Sharp End page 18

Communications director Jason Fernyhough sales director Oliver Rowe and business development director Ian Hooper have bought a two per cent share of the company in return for full board directorships.
They each have an option to acquire 13 per cent more over the next few years.
MD Nigel Harrison who shares ownership of the company with his wife and company finance director Donna said the move was in response to outside interest.
"We were approached by a local company but the workforce was down in the mouth about the prospect of not having as much input in the business and wanted me to remain" he said.
If Fernyhough Rowe and Hooper build their combined share to 45 per cent the rest of the company can be bought through a bank loan.
Phonebox which has five stores in Redditch Solihull Tamworth Lichfield and Shrewsbury has a £5 million turnover and employs 65 staff.

"Teletext Mobile has been designed with the user in mind" said Teletext commercial text manager Jonathan Creber. "It is quick and easy to use and relatively cheap."
The service went live two weeks ago and aims to provide information for subscribers 24 hours a day.
Creber said that "early indications are promising".
Eagle Eye Technology director Ed Pippin added: "Now almost every mobile device sold has access to the Internet and old barriers such as slow access poor screen resolution and lack of colour are a thing of the past."
To get the service on a mobile phone users text the word Teletext´ to 8430. The service is free but users will have to pay for GPRS data transfer.
Teletext Mobile content will be similar to the information found on text services on ITV and Channel 4. "All the page numbers people are familiar with from the television site will also be the same on the mobile provider" said Pippin.
"Teletext has chosen now to enter the market because it is at these early stages that browsing habits get created and brands make a name for themselves" he added.
Teletext head of mobile Marcus Thornley said: "As the costs of the mobile Internet fall we hope to increase the use of rich media on Teletext with more video."

The full amount of Vodafone´s investment is undisclosed but it is expected the cash will fund the SP´s growth for the next five years.
Yes MD Keith Curran who will continue to run the company alongside his existing team insisted that Vodafone´s operational input would will be minimal.
Newly appointed Vodafone business unit sales director Mark Bond explained that the decision was dictated by the prospect of Yes going elsewhere for funding. "The directors were talking to venture capitalists to fund its growth" he said. "We have seen some distributors go to the wall and some others acquired. This was the only way to work it so that Yes would continue to be Yes."
Bond insisted the existing team would remain. However part of the deal is that Vodafone is to have a regular report on Yes financials. "We do not intend to suck them into Newbury" he said.
Curran said he was involved in the negotiation process with Vodafone over the sale for the best part of six months. The deal is a guarantee the network will pursue SME revenues through the channel he said.
DM Telecom MD Dino Maroudias typified the optimism with which Yes dealers appear to be greeting the deal.
"Yes has high ARPU and low churn. It looks after its customers and has created a real niche in the B2B space. If Vodafone bought it outright it would lose that."
Pioneer Communications Solutions MD Marshall Frieze was also optimistic. "It´s going to make us more competitive in the marketplace. Hopefully we will get access to better products as a result."
TMD UK owner Geraint George said: "It will hopefully give us access to products now only available to Vodafone´s corporate customers."
See Our Shout page 14

But experts warned that a reverse charge procedure would create VAT fraud in the dealer channel.
A reverse charge would remove VAT payments between VAT-registered firms in the UK. VAT would only be paid by the end consumer. The sole responsibility for VAT repayments to Customs would sit with retailers under the reverse charge scheme.
Bond House director Mike Cheetham said: "Dodgy online retailers will be able to generate large revenues at least 17.5 per cent of the cost price even if they sell products on at cost. Were not talking about carousel fraud on hundreds of thousands of phones. It will be on a smaller scale but much harder to track."
Alias Dass of Dass Solicitors said: "VAT fraud will move into retail channels because VAT will be collected by retailers. Fraudulent retailers will be able to accumulate lots of VAT over three-month periods put in a dodgy tax return and then either continue for another three months or shut the company right away and set up another."
The European Commission said last week that it would support the UKs application for a reverse charge backed by Germany and Austria. Once approved the plan must be accepted by all EU nations which could be a stumbling block.
"Fraudsters will register companies abroad and run the scam abroad" said Dass. "Traders that traditionally traded through Dubai will now use the UK instead because it will be a VAT-free zone. It will make carousel fraud easier because the UK VAT-free zone is closer."
The Commission wants to implement wider-ranging VAT measures to deal with fraud on a European scale but there is no agreement on what the measures will be.

The appointment coincides with the announcement from the network that it has acquired a stake in hitherto independent service provider Yes Telecom.
The initiatives come after a group-wide strategic review and are an attempt to get Vodafones business house in order following a number of high-level departures.
Bond previously marketing head at the unit will report directly to enterprise business unit director Kyle Whitehill.
Head of indirect sales Rob Sandford will continue to report to corporate sales chief Amanda Baker who has recently been caretaking the sales director role. Baker will report to Bond when he becomes sales director.
Bond has been at Vodafone for 10 years. He spent some years at Vodafone Connect and at the enterprise marketing division. Prior to that he worked at Cable & Wireless for 15 years. He has run channel marketing for three years at Vodafone UK.
Despite his long experience at Vodafone this is Bonds first sales role. However he insists he has the required experience.
"Channel marketing can entail some account management but Ive not done a formal sales role before" he said. "Its true marketing people have a different outlook from sales people. Marketing is perhaps a bit longer term whereas in sales the questions is how can I hit that target right now? But all the dealers know me so this isnt such a major change for me."
Bond was unwilling to go into details about his proposed strategy but he recognised the network has much to do to keep up with current trends in the industry.
"I see a lot happening in our business" he said. "There is a lot going on in broadband. There is a lot of talk about fixed-line. We are seeing some consolidation in the channel and service providers are up for sale."
But he is adamant that the network has not been lagging its opponents.
"Weve not come late into the market" he declared. "Vodafone has been selling fixed-line for some time. Weve been offering broadband for two years. Its true weve not put these offers in the front line. Now customers are asking about these services more we will probably bring them up to the front of the process.
"Change is required and we will be looking at what we need to do but the details havent been finalised. Weve had an internal announcement but now we need to get out and speak to the channel. There are a few businesses out there that are not sure what to think about us at the moment so I am going to get out there to them."
Yes Telecom MD Keith Curran said: "Ive known Mark for some time. I can only see his appointment as extremely positive. He understands our business inside out and Ill probably be working more closely with him than anyone else at Vodafone."

The pressurised selling environment is thought to be the result of the appointment of Anthony Catterson as MD of retail in April.
Catterson who is now responsible for the 669 Carphone Warehouse stores was previously managing director at Phones 4U and IT distributor Micro-P where he made significant job cuts.
A Carphone Warehouse store manager commented: "There are rumours going round the industry that he is here to axe jobs. He got rid of a load of people when he was at Phones 4U and then left. Were worried hes here to do the same thing."
Carphone Warehouse refused to comment but another Carphone store manager revealed: "In stores the pressure is certainly on. There is a focus on selling new subscriptions. Customers often come in to shops wanting just TalkTalk broadband but weve got to try to sell them a new phone at the same time."
One source close to the retailer revealed that new sales strategies to pressure teams into action were being put into place at area manager level. According to the source staff have to ensure 20 per cent of customers who take broadband also take a phone or face disciplinary action.
One store manager revealed: "There was an area managers meeting about a month ago where Catterson said: Im looking forward to working with most of you in the future. According to my area manager he kept repeating this phrase basically implying they wouldnt all have jobs in the future. They have to perform or they face the sack."
The source revealed: "Catterson has made it very clear what he wants. He wants top sales performance. There are no congratulations if you get it 90 per cent right. It has to be 100 per cent or youre out."
The comments come as Carphone Warehouses full-year revenues have grown by 30 per cent to £3 billion with pre-tax profits at £136 million.
CEO Charles Dunstone said he would pump £50 million into broadband adding that he intended to open a further 80 stores primarily in retail parks and small towns.

Peter Cowley director of Interactive Media at Endemol the company behind Big Brother said his firm has been offering profitable Big Brother updates on mobiles for the past couple of years. He claimed the figures are "staggering" with mobile users downloading 10 million Big Brother streams in just 18 months.
"It´s good money but not everything we do with mobile brings in the money" he said.
MTV vice-president of strategy Angel Gambino suggested the only way companies like MTV can make money from the service is to own rights to the content.
She said users who download MTV streams on their mobiles do so for short periods but regularly three times a day on average.
One surprise from research firm M:Metrics was the finding that mobile users generate around three times more content than they consume. "Users are uploading personal snaps and videos to the Internet as well as sharing the files with their friends and colleagues" said senior analyst Paul Goode.
Where they do consume paid-for content said Ovum principal analyst John Delaney it is clear mobile entertainment being viewed is quite different from armchair TV viewing.
"It´s all about snacking" he said. "Mobile users snack on mobile entertainment for just five or 10 minutes at a time. Is there a business model for mobile entertainment services that generate just €10 (£7) a month in revenue? I´m sceptical" he added.
Bango sales director Martin Harris argued that there is a business model for low-cost mobile entertainment but he referred more to static content a lot of which is adult´. Bango is handling O2´s new adult range of Active services which Harris admitted O2 doesn´t want to handle itself.
Apart from pornography there´s also mobile gambling.
Matti Zinder CEO and founder of Spin3 the company that developed the technology behind a growing number of mobile Internet sites claimed that mobile gambling is now reaching critical mass with users more than willing to download a Java applet to have a flutter on their handset.
Spin3´s latest claim to fame is Tomb Raider a five reel 15 payline mobile slot machine package that offers users many more ways to lose their money.
But the mobile slots as they´re called are a step or two better than the ones in the pubs or clubs as witnessed by the company´s other major offering Major Millions a progressive jackpot game than can pay out up to a hefty £250000.
Zinder´s company which has more than 130 staff worldwide doesn´t make its money from offering mobile gambling services to users. It designs the technology that makes it all work which includes age verification banking interfaces and the gambling software itself.
It was ironic that Spin3´s announcement of its latest mobile gambling achievements were overshadowed by the previous night´s lead story on the BBC Nine O´Clock News about Internet gambling becoming a major problem in society.
But what about non-adult mobile content? Is there enough revenue for a viable business? Harris pointed to the Manchester United site which lets fans download a customised mobile phone logo with their team´s latest result on it.
"At £3 a throw Manchester United fans have been flocking to the service and they keep coming back as no one wants an out of date logo on their mobile" he said.

The European Court of Justice ruling on the Bond House case undermined Customs´ argument that all transactions which form part of a carousel fraud are not "economic activities" and should be penalised by withholding VAT due to honest traders in the supply chain. The decision implies that Customs´ treatment of innocent traders was contrary to EU law.
As Customs has no jurisdiction to award damages which would be expected under EU law it will be necessary to bring an action in the High Court.
As we anticipate a large number of claims an application for a Group Litigation Order (GLO) was made in the High Court on May 4. London law firm DLA Piper Rudnick Gray Cary UK LLP were appointed lead solicitors by the High Court in what will become known as the "Missing Trader Intra Community Damages Group Litigation".
The litigation will essentially become a class action pursued by a test claimant on behalf of the rest of the group. All claimants who issue relevant claims will be included within the GLO and will share in its costs.
The decisive issue is whether Customs manifestly and gravely disregarded the limits on its discretion.
All the indications are that the interpretation was adopted by Customs in order to deal with a problem faced by the UK Treasury. No one doubts the seriousness of that problem. There is however real doubt as to whether a deliberate attempt to pass that problem on to wholly innocent traders can be justified.
A key factor is likely to be the extent to which Customs was entitled to rely on the original decisions of VAT Tribunals in enforcing its "non-economic activity" approach.
There was already significant doubt as to the correctness of that decision particularly after the release of the opinion of EU advocate general Miguel Poiares Maduro in February 2005. It was also known that this approach was causing significant damage to the industry.
Against this Customs will argue that it acted in reliance on a judicial decision and that there was a significant loss to the UK Exchequer caused by missing trader fraud.
It may also argue that its position is supported by the fact that the High Court which made the reference to the European Court did not regard the matter as acte claire´ or so obvious as to be without dispute.
But the mere fact that the national authority wrongly persuades the national court to accept its interpretation does not justify it.
Customs will also point to an apparent qualification contained in the European judgment that says the right to deduct input tax is not affected by the existence of a fraud unless the claimant knew or had "any means of knowing" about the fraud. As a result less-than-perfect due diligence by a trade may be used to justify an adverse assessment.
It is a rare thing for a national court to award damages against a revenue-collecting authority for losses arising as a result of tax administration. However the legal basis of the action Customs took against innocent traders was widely criticised at the time and was very likely to cause commercial losses.
The GLO is likely to incorporate a provision requiring claims to be made within a certain time likely to be six months from finalisation of the relevant issues to be included so proceedings need be issued as soon as possible.

The Mobile Data Association (MDA) said last week that a total of 3.13 billion text messages were sent in April the highest ever monthly total for April and an increase of 24 per cent on the same period last year.
Ahead of the World Cup the MDA also revealed that footballing events in May saw huge spikes in usage. Over 120 million text messages were sent on FA Cup Final day on May 13 and 124 million were sent on Champions League Final Day on May 17.