Sprint Begins Charging Agents for Support

Beginning Feb. 1, Sprint Nextel (S) has imposed charges on its Business Indirect Partners and Business Solutions Partners for access to business indirect channel support managers, channel support managers and the programs they support. While optional, the charge has gotten mixed reviews from some of the carrier’s agents as well as elicited concerns that this model, if unchallenged, will be adopted by other service providers.

That concern may be very real. Less than 5 percent of the company’s partners opted out of the program, according to Sprint spokesperson Stephanie Greenwood. Several agents who spoke to PHONE+ said they still hoped to negotiate with the company on the terms and would not discuss the matter with PHONE+ for fear of jeopardizing those talks.

Specifically, Sprint is invoicing agents for fees on a monthly basis based on the number of wireless gross activations and/or the wireline base revenue for the previous month, according to documents obtained by PHONE+. The minimum monthly fee is $100 and the cap is $4,000. Wireless support ranged from $8 per activation for 100 or fewer to $2.50 per activation for 1,000 or more. As an example, 500 gross activations at $3.50 each would produce a $1,750 monthly fee. Wireline fees start at $0.0075 per dollar for bases of up to $99,999 and $0.0035 per dollar for bases greater than $1 million. A $500,000 wireline base at $0.0045 per dollar would generate a $2,250 monthly fee.

Considering this wireline example, depending on the commission – let’s assume 10 percent to 20 percent – it would take between $11,250 and $22,500 per month, or $135,000 and $270,000 per year, in new sales to break even.

One agent PHONE+ spoke with on condition of anonymity said that the price is steep and continues to climb every month that new sales are added.

Given the choice between a commission cut and the support charge, however, the agent said this was the “more moral way to do it” because agents had the chance to opt out.

Master agents, however, have reason to disagree. Determining if and how to pass these charges on to subagents is trickier. But when 75-80 percent of the carrier commission is passed along, there isn’t a lot of room to absorb these extra fees, agents told PHONE+. An across-the-board cut, on the other hand, would be easier to pass along, they said.