O2 has defended its imposition of 180-day payment terms with some suppliers of IT and managed services.
UK sources report that many services contracts up for renewal are now coming with 180-day terms as standard, increased from 60 or 90 days in previous incarnations.
A statement from an O2 representative claimed that the terms are not a new policy on the part of parent company Telefonica, but accepted that some UK suppliers might be having to deal with them for the first time.
"Telefonica has a range of global payment terms which do range up to 180 days, depending on the nature of the purchase category," said the representative. "There have been no changes to these recently, but it is possible that some suppliers, during contract renegotiation, will have seen these terms for the first time."
The mobile giant added that any suppliers with cashflow concerns could take advantage of O2's factoring offering, allowing them to receive money ahead of the stipulated terms of their contract.
"In terms of helping suppliers with their cashflow situation, we do offer a factoring proposition that enables the supplier to receive payment in advance of agreed terms," said the representative. "Like other supply-chain finance propositions, this can represent a cost-effective line of credit for the supplier."
But some in the industry have blasted the length of the terms. One commenter on ChannelWeb branded them "an utter disgrace".
Robert Downes, policy advisor at the Forum of Private Business (FPB), said the firm should be ashamed of itself.
“Hitting suppliers with this at any time of year is bad, but to do it just before Christmas puts the tin hat on it," he said. "O2 is attempting to divert the blame on its parent company, but that just doesn’t wash and it certainly won’t make a jot of difference to those businesses affected.
“180 days is a breathtaking time to pay – that’s half a year. Frankly, those suppliers financially able to walk away should do just that. But as is often the case in these situations, particularly in the current climate, that’s just not possible for most.
“O2 should hang its head in shame over this scandal.”
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