[Ben]

http://www.mobiletoday.co.uk/artman-test/publish/article_814.shtml


Vodafone cut its ties with Dial-A-Phone, the country’s biggest online retailer, last Thursday after the operator claimed it was not getting ‘sufficient return on its investment’.

More specifically, high churn levels and large numbers of customers downgrading to cheaper tariffs were suggested as the principal reasons for the dispute. One well-placed source said: ‘It’s a bit of low ARPU, a bit of tenure and a bit of the [high] cost of acquisition.’

It is believed that the decision is part of a broader review of Vodafone’s dealer and distribution channels being carried out by the new management team under the helm of Tim Stone, who was appointed as the acting replacement of outgoing sales director sales director Richard Daly.

A Vodafone spokesman said: ‘We’re not trading with Dial-A-Phone because there is not sufficient return on our investment [due to] the types of customers and type of ARPU.’ However, he said: ‘The door is not closed; it’s all very amicable.’
[continued]

So, cracking down on the selling of cheap/free phones with high spend contracts where the users then switch down after 6 months - that sounds fair enough to me. Dial-a-phone is the nets biggest connector so the quality of connections must be pretty dire for Vodafone to step back from them. But are Vodafone cutting off their nose despite their face for the sake of better ARPU?

[3GScottishUser]

The times are a changing.

There had to come a point when 'box shifting' is'nt justified. Vodafone seems to have reached the end of the line giving product away for no worthwhile gain and as a mature player with considerable on-line marketing clout one can appreciate their logic. Looks like the game might be ending for some of those companies who have been cashing in on what has been nothing more than a 'giveaway' business for a while.

[Ben]

Vodafone have made some changes to their online store recently, it definitely seems easier to use now, so I don't doubt that with the deals they're offering they can get the online volume they need in-house and manage the customer 100% - and that has to result in lower churn providing it's done correctly.

I wondered why the pair didn't just offer far more conservative Vodafone deals on the Dial-a-phone website rather than cut ties completely. Perhaps Vodafone doesn't want to appear unfavourably next to the other networks. Dealers online and off are going to be in for a tougher time next year if the networks make a conscious shift to loyalty, high ARPU and low churn. We've already seen with 3G that distribution of handsets to independents is being controlled to a far greater extent than on 2G.