Dextra is expected to confirm the Nokia accessories contract this week.

Nokias director of communications Mark Squires said: We parted amicably and have never stopped talking with Dextra. But there is no signed agreement with it at present.

Dextra refused to comment.

An Orange spokesperson said: We are always looking at ways in which we can support our Orange Specialist Partners. Now that broadband is part of our proposition we are shaping a consumer package that will only be available through selected partners later this year.

Mainline sales director Chris Hough said: All Oranges key launches will be available through the channel eventually. Orange Broadband will certainly come down to the channel. Orange knows that it will sell if there is commission behind it. Orange is looking to use the channel going forward for different product areas. Mainline is a trusted valued partner for Orange and we hope that we will get to trial any launches in the channel first.

It also added an extra 20 meaning distributors can pass down to dealers as much as 80 extra per consumer connection. The revised commissions have been guaranteed until the end of the year which suggests that it is like Orange looking to issue a quarterly price book.

T-Mobile upped commissions mid-September by putting an extra 45 on each consumer connection. Having told distributors in July that it had exhausted its channel budget and would not put money back into the package until after Christmas its commissions for consumer connections are now on a par at around 330 with its spring levels.

Avenir managing director Tanny Price said: Its good news. T-Mobile was holding out and looking at different strategies. Its recent strategy obviously hasnt worked. If dealers back this then it will see good results between now and the end of the year. There are only so many times you can chop and change before dealers decide not to back you but this looks like a good move.

Mobile News understands that O2 is the most likely to pressurize Carphone first. It is estimated that 50 per cent of Carphones monthly connections go to O2 and that it would be most eager to twist the knife.

Both O2 and Orange made public statements last week that they viewed Vodafones decision as an opportunity. Orange went so far as to make clear that it is reviewing its rolling three-month contract with Carphone for next year.

Vodafone itself suggested that the retail landscape would change and that other networks would react to its lead.

Vodafone director of commercial operations Ian Shepherd said: All the networks have said in the last week that they are having a good think and Im not surprised.

The question that networks have to ask of indirect sales is where the value is coming from. The relationship has to deliver business that the network wouldnt get elsewhere. This relationship with Phones 4U is designed to generate value as well as sales.

One source said: The commissions paid to all the indirect channels have been as high this year as they have ever been – since the heyday five years ago. The cost to networks of acquisitions through the indirect channels is astronomical.

Carphone is on the back foot now. The networks are in the driving seat again and theyll look to cut commissions to Carphone. It is an ideal opportunity to exert a bit of pressure.

Phones 4U connects on average around 70000 consumer contracts per month according to sources close to the networks. Phones 4U is understood to have agreed to deliver in the region of 35000 consumer contract connections per month to Vodafone.

During 2006 Phones 4U is thought to have delivered most – about 30-35 per cent – of its connections to 3 a much higher proportion of 3s new monthly subscriptions than delivered by The Carphone Warehouse.

Phones 4Us agreement with Vodafone would appear to put 3s numbers under threat.

3 denied that the Vodafone deal would affect it. A 3 spokesman said: 3 does not believe that the Vodafone agreement with Phones 4U will impact its business with the retailer. If there was to be an impact it would be felt equally across all the networks. But as a brand 3 has a different appeal to Vodafones.

Phones 4U and Vodafone said that targets would be met by working to increase footfall to Phones 4U outlets rather than cannibalising connections across other networks.

Vodafone director of commercial operations Ian Shepherd said that the number of Vodafone subscriptions guaranteed by the deal would not vary much from the kinds of numbers Phones 4U has connected for it in the past.

It is not going to require Phones 4U to unduly skew its business in our favour he said.

Around 90 per cent of the business done by East Anglia dealership Digital Phone Company is on Vodafone.

Its managing director Phil Rider said: Carphone has opened stores in most of the towns that we have a presence. This decision by Vodafone gives us an edge.

Vodafone puts just one third of its consumer contract connections through the indirect channel and most dealers said its exit from Carphone would have little impact on their businesses in strictly financial terms. But they warned that neither Carphone nor Phones 4U could claim to offer impartial advice any more.

Carphone cant offer all networks and Phones 4U is committed to hit targets on Vodafone so it cant [be impartial] either said one dealer.

Dealerships connecting either Vodafone consumer or business customers via a distributor can still connect to Vodafone despite the Phones 4U deal being billed as an exclusive third-party retail contract in other press.

Vodafone classifies independent multiple retail differently to the dealer and distributor channel. The high street multiple retailers have connected Vodafone via its consumer business unit. The demise of The Link and the cancellation of Carphones pay-monthly sales contract means that Phones 4U is the only third-party multiple retailer that can now connect Vodafone contracts.

Distributors connect Vodafone via its enterprise business unit which offers a far meaner remuneration package than its consumer business unit for consumer connections. The exception to this rule is Dextras airtime business which still connects Vodafone through Vodafones consumer business unit.

Dextra receives better commercial terms on Vodafone consumer connections – it is able to offer around 50 more per box. Vodafone denied claims last week that it is looking to re-negotiate its airtime contract with Dextra to run it through its enterprise business unit along with the rest of distribution.

Vodafone director of commercial operations Ian Shepherd said: The Dextra agreement reflects the balance of consumer business we are doing through Dextra. There are no plans to alter that agreement.

Hugh Symons part of Carphone connects Vodafone through its enterprise business unit like all other distributors and is unaffected by the Carphone decision.

Hugh Symons business manager Bob Sweetlove said: We have a different legal contract with Vodafone to Carphone. This is an internal decision by Vodafones consumer business unit.

Labour parts and transport costs will be met in full according to inservio global business manager Gerard McCarthy.
Originally an integral part of the BenQ business inservio was spun out as a stand-alone company in April this year prior to the insolvency.
Inservio is currently sharing the BenQ site in Bracknell. It is likely to come out of administration in December and move to a new location.
McCarthy said: Negotiations are taking place as we speak in Munich but it is looking positive that warranties will be honoured after December 31.
BenQ Mobile s UK managing director Philip Rambech said: Putting an acceptable solution in place is of paramount importance to us. We are working to provide a good level of service. going forward and I m confident we ll find an acceptable solution.

Vodafone s channel strategy suddenly looks clearer. It still has uses for the independent channel it says but it wants dealers to focus on the parts of the market that it cannot reach namely the small office-home office (SOHO) sector generally defined as business contracts of between one and 10 handsets.
Vodafone has a miniscule share of the independent channel less than 10 per cent. O2 has a slightly larger share and the remainder of the business put through the channel is split between Orange
T-Mobile and 3.
At the same time Vodafone has a 46 per cent share of the enterprise market in the UK. O2 is the only network with a comparable chunk. Within the enterprise market it has a 55 per cent share of the corporate market a 41 per cent share of the small-to-medium enterprise (SME) market and a 31 per cent share of the SOHO market.
We want to grow our share of the SOHO market that s the market we can grow significantly and it s the market in which the independent channel has its hooks explains Vodafone s Kyle Whitehill director of its UK enterprise business unit.
We want to work with dealers to grow that share. That is the plan. That s where we will build capability it is a complicated world of devices and IT support and all of these things and business customers need someone they can trust and talk to. The good quality independent channel is best positioned to serve.

Segmentation
Its segmentation into two separate business units consumer and enterprise two years ago pigeonholed the distribution channel in a way that it was unaccustomed to and appeared to confuse Vodafone s strategy.
Distributors with the exception of Dextra s airtime division have been forced to put consumer connections through Vodafone s business enterprise unit ever since with such poor remunerative terms that Vodafone has practically vanished from independent retail.
The complication has been that there is cross-over between consumer business and SOHO connections within most distributors. That is blurred and a lot of distributors deal with all types of business. It is a complicated customer marketplace says Whitehill.
But it appears that the distribution channel is just now coming around to Vodafone s classification system and distributors are being forced to choose between consumer and business connections. They are also being made to align themselves more closely with Vodafone to meet its key performance indicators on substantial volume targets in return for longer-term contracts and commissions (see box right).
But despite the rash of headlines in recent weeks regarding the termination of supply contracts with The Carphone Warehouse and Fone Logistics as well as the axe that hangs over Hugh Symons and MoCo Distribution Vodafone s plans to overhaul distribution date back to the segmentation of its business.
Whitehill says: It worried me a couple of years ago when I looked at the distribution market because it has changed enormously from what it was six years ago when it was acquisition led into a market that is all about retention.
We are asking businesses to align and to do that they have to get retention cracked. If distributors and dealers want to work with us they have to be able to provide a good service and to be able to keep customers. Our partners have to get concrete around the customer offer. Some have already grasped that like Yes Telecom which has low churn and high ARPU.

Alignment
Vodafone will run service providers Isis Telecommunications and Aspective both of which it acquired last week in the same hands-off manner that it controls Yes Telecom. But its purchase of Isis and Aspective differs from its interest in Yes insofar as it bolsters Vodafone s service of the corporate and SME sectors which it already dominates. Isis typically handles fleet contracts of around 2000 BlackBerrys points out Whitehill.
And although Whitehill compares both businesses with Yes for their nimbleness and service levels its interest in them is down to its desire to become a one-stop communications provider above and beyond straight mobile in line with Vodafone boss Arun Sarin s mobile plus vision.
The dealer and distribution channel on the other hand has the kind of local knowledge and contact with small business customers that Vodafone cannot replicate itself which explains its purchase of Yes earlier this year and its newfound closeness to a select bunch of quality distributors including Anglia and Avenir.
Says Whitehill: The indirect channel has strong partnerships. It knows its customer base extremely well and has the ability to serve local businesses in a way that we as a network cannot. Small businesses like what they are doing. That s what we talked to [Yes managing director] Keith Curran about 18 months ago. At the same time that relationship has to be wrapped in good service local contact and care.

Better terms for chosen few
Vodafone is asking its partners in retail and distributors to align themselves more closely with it. It is offering longer-term contracts and price books for their loyalty and the delivery of high-volume quality business connections.
Fone Logistics was on a 90-day rolling contract with Vodafone typical of network distribution contracts when Vodafone pulled the plug last month. Such deals will be extended for its distribution partners going forward.
Vodafone signed a year-long contract with Phones 4U in October at the same time that it cut its post-pay ties with The Carphone Warehouse. Phones 4U is understood to have agreed to deliver Vodafone around 35000 consumer connections per month.
Vodafone s Kyle Whitehill director of its enterprise business unit says that it will offer its partners better terms and more security in return for closer alignment next year.
It is absolutely our intention [to offer more support to the partners that we ask to align with Vodafone]. Two years ago we said that we didn t want the independent channel to be nervous about changes in our strategy every quarter. We want to build longer-term contracts with partners and to have them rely on our support says Whitehill.
At Vodafone I plan on a three-year cycle and make a very detailed one-year business plan. We re not there yet with our independent partners but that is what we want in terms of contracts and commissions. That is the goal.

The Carphone Warehouse has been signed up as its first customer and will range the CPW-603 wireless headset.
Iqua will work with Data Select s accessories division Accessories Select headed up by former Nokia UK accessories chief Neil Henderson to build its UK presence within multiple retail network retail and the dealer channel.
The deal was signed ahead of a two-day tour of Data Select s key accounts.
Data Select MD George McPherson said: Iqua has a very innovative and interesting range of wireless accessories which can quickly develop a significant footprint in the UK.
With the Nokia heritage among its founding partners and distribution experience there is also a broad industry knowledge evident in the products.
Pankakoski said: We were impressed by the proactive approach of its Accessories Select team and wide distribution network. We are confident of developing a solid presence in the UK market.
Data Select is stocking Iqua Bluetooth headsets and hands-free kits among other accessories.