Vodafone has placed a cap on the number of business upgrades put through by dealers until the end of its financial year.
Between January and March 31 (Vodafone’s Q4) dealers are permitted to put through just 55 per cent of their average quarterly numbers.
Dealers have each been given a monthly upgrade limit which has been calculated based on their monthly average over the past six months.
Vodafone will not pay any commission for upgrades that exceed the monthly limit.
News of the decision broke last week (December 12) when Vodafone head of partner services Rob Mukherjee informed all dealers via email.
Mukherjee said the decision was based on the current model no longer being sustainable due to the frequency of ‘in-life’ renewals – accounts eligible for upgrade from month 12 to 18 based on customer spend.
He said the move, which will force dealers to be more selective about who they upgrade, will be an “important driver” as the firm readies its move to a revenue share model.
Mukherjee wrote: “Rather than a blanket change in our commercial model, we want to allow you to manage your own customer renewal activity within given boundaries.
“We find it is the least impactful to your business and, importantly, begins to align our partners to our new commercial model.”
However, the decision has been criticised by Vodafone partners, who have accused the operator of poor forecasting.
One Vodafone platinum partner claims his account manager said the caps had been imposed due to “overspending on acquisition and retention” in the first part of the year, leading the network to scale back costs.
Some now fear rivals connecting to other networks will target their customers as a result, with some stating they may have to churn the customer themselves rather than risk losing them to a rival.
One Vodafone partner said: “There is going to be a big backlash to this. Those I have spoken with are furious as they will be forced to let down customers expecting to upgrade. That’s not an easy conversation and we know full well others will look to pounce immediately. Not a great start to the year.”
A Vodafone platinum partner added: “They’ve sprung this on us at very short notice, telling us right at the end of Q3 that we have limits for Q4, this shouldn’t happen at
all, but the communication’s been appalling.”
Vodafone has confirmed its head of enterprise finance, Richard Schafer, has this month left the business.
Schafer joined Vodafone as head of finance in 2007 before becoming head of enterprise finance in 2010. Prior to joining Vodafone he had spent six years with Three.
He is the third major departure from Vodafone in the past month following director of small business Tim Stone, who departs next month after 17 years, and UK enterprise director Peter Kelly, who leaves in
March. Their positions will be filled by channel partners sales director Nick Birtwistle and Vodafone Ireland CEO Jeroen Hoencamp respectively.