[3GScottishUser]

From Hugh Symons Website:

Important note regarding upgrades

3 has recently seen an increase in the number of stockists who are selling upgrades or disconnecting and reconnecting customers on 3 on a large scale across customer bases other than their own.

We need to reiterate that as previously communicated by 3, this practice does not comply with the terms and conditions of supply from 3 and as such you need to ensure that you refrain from this practice immediately. Where evidence is found of proactive upgrading of customers who were not originally connected by you, 3 will suspend your code for 72 hours whilst an investigation is made. If this evidence is proven then a warning will be given that any subsequent instance of this practice may result in termination of your approved stockist status.

Where this connection has been made through a disconnection and reconnection on 3, these connections will attract commission as per an upgrade not a new connection.

http://www.hughsymons.com/documents/hscm/pdf/10_2005_hscm_pdf_3_update.pdf

[Ben]

Hmm. So they (Three) seem to be telling dealers not to churn their customers and to upgrade them instead... either way the commission will be the same. Perhaps commission on upgrades should be higher than new customers... but that much value of customer loyalty would be silly, right!

They're also saying don't go after upgrades for customers not originally connected by the same retailer... Um, that seems a bit strange :S Surely any business should be able to proactively encourage customers of a network to upgrade, whether they took out their contract with that particular business or not?

Can someone make better sense of that than me?

[3GScottishUser]

I have read the above a few times and I can't really make much sense of it.

What they seem to be saying is that dealers are not allowed to advise customers to terminate and take out a new contract if their handset was supplied by another company. Bizzare!!

It was only a matter of time until this type of trade was stopped as it must cost all the networks a fortune, paying out huge acquisition commissions for people they already have! Sky TV have one of the most successful anti-churn operations in the UK and only ever subsidise one receiver to a single customer at an address, unless they take out multi-room or Sky+ of course.

Looks like the days of the huge churn commissions could be coming to an end, then again I suppose dealers who see someone with a 3 handset will simply sell them onto another network to get the full commission from them.

[Ben]

Hmm - yeah, if the networks only paid dealers 'new customer' commissions once per name and address then it'd certainly put an end to churn via this method. Unfortunately I think it'd come at a large detriment to the consumer. It just wouldn't be enforceable - if a customer had already churned through every network they'd have a hell of a job finding a sales assistant willing to give them the time of day.

I guess this is just another network-dealer relationship issue, where the network tries to manipulate how the dealer sells their products. The networks have too much power in this respect, IMHO.

[Hands0n]

What happens if I move home? Do I have to go back to my original dealer to get an upgrade/reconnection? How very absurd, and unenforceable.

If they [the mobops] do not like this model then the solution is simple. Start charging equitable tariffs and the people will judge you with their wallets. Make it attractive to stay with you and people will do so, without a thought of switching elsewhere to get a better tarriff/handset/both. Loyalty is bought in this environment as people get more savvy.

The relationship between mobop and dealer is symbiotic and should be recognised as such. The mobops could put their own shopfronts out there but they choose not to for good economic reasons. Thus, the dealers not only fill the void they are funding [at least part of] the shopfront for the mobop.

There is little point beating up the dealers who also have to make a living or there'd be little point getting up out of bed in the morning.