Ofcom is sympathetic to the plight of mobile phone dealers that suffer from operator clawbacks, Chris Caudle, chairman of the IMPDA stated, following a recent meeting with the regulator.
The IMPDA chair and several members met with the competition division at Ofcom to discuss how clawbacks are affecting dealers. The move came after Orange’s recent new clawback announcement concerning 10 minute minimum phone usage enraged IMPDA members further.
Speaking to Mobile Business, Caudle commented: “As far as dealers are concerned, Orange’s new clawback is just one clawback to many.”
Caudle said that Ofcom was aware and of the issue, and concerned particularly with the commonly used suspected fraud clawback. He stated: “Ofcom told us it believes the networks are behaving unfairly in taking clawbacks from dealers. Dealers are finding it very difficult to compete with networks as it is. If clawbacks didn’t exist or reduced significantly, dealers would have more resources to do better business.”
The next step, following consultation with the IMPDA’s legal team, is to raise a formal complaint on the issue with Ofcom. Caudle added: “We would prefer to have a discussion with the networks, but we’ve asked time and again for meetings and the networks haven’t bothered.”
However, a spokesperson from Orange disagreed. She told Mobile Business: “We believe the changes made on connection commissions are fair. We are looking to overcome the issue of phantom connections that are connections made, but never actively used. This can mean that we pay out commission to dealers for connections which sometimes just never get used.
“As we are in a hugely saturated market our focus has to be placed on prioritising the quality of our new and upgrade connections, rather than just the quantity,” she continued. “We have not heard from IMPDA about this issue, but we advised all of our dealers and distributors about the changes to our commission structure.”
T-Mobile refused to comment.