Sources close to Comms Business Magazine say that the new two year contracts being offered to BT channel partners are less than satisfactory. Emails we have seen confirm that BT is aware of the severe potential disruption their actions could cause to their partners business.
One reseller stated, “The contract still contains the usual BT get out clauses. Effectively the terms are not worth the paper they are written on as it still says that BT can amend their SSRA (Strategic Sales Referral Agreement) at any time. This means the contract can be cancelled at any time at the whim of BT, with potentially no notice.”
Another concerned reseller noted that BT’s new channel model calls for a three year payment of commission on any existing revenue from the date it was first put on the BT Orca system, and a two year payment on any new orders put on the system from 1st April this year.
He said, “This will have a huge impact on any long standing BT channel partner. Many of the early BTIC partners such as Azzurri and Sterry for example have huge commission payment streams based on LCR reprogramming work carried out on behalf of BT many years ago. These will drop off immediately.”
The reseller added, “How this will effect people like Azzurri is an unknown quantity, but given the fact that they are looking at floating in the near future, it would be very damaging to find that such an important form of revenue is not only drastically reduced, but also unsecured beyond 30 days. All present partners must be looking to other channel routes to try and secure their revenues; they simply cannot expand this business model knowing that it is so insecure.”
Speaking to Comms Business Magazine yesterday yet another reseller noted that the danger for all partners is that when BT realise that a partner is putting business with another carrier, or that they have set up their own virtual carrier operation, BT will react in the same way that they have with their ex-partner Sonda Communications in Birmingham.
“With Sonda BT allegedly found a reason to terminate their contract without notice. Sonda had started their own billing company “BillSmart” some 18 months ago with BT’s knowledge, however as the new management team at IC saw it start to build revenue more aggressively , they stepped in and terminated their Indirect Channel contract immediately. I believe Sonda had been selling around £350k of new BT Business Plan contracts per month on behalf of BT up to last week when they terminated their IC contract.”
Sadly it is an indictment of the power of BT in the channel that all resellers we spoke to did not want to be identified. Comms Business Magazine will be following developments closely and putting these concerns to BT.