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giffgaff: Replacing traditional telecoms business model with co-created products and services approach
Despite declining revenues and increasing saturation of the overall UK telecoms market, mobile retail operations revenue increased in 2012, according to the independent regulator and competition authority – Ofcom. Although the rate of growth of the number of mobile subscribers decelerated significantly, there are still business opportunities to take advantage of, especially for mobile virtual network operators, who incur much lower costs and enjoy higher profit margins than traditional operators.
giffgaff is a Telefonica-owned, SIM-only, pay-as-you-go mobile virtual network operator active in the UK. The company rents its mobile network from O2 and it has managed to successfully launch a new brand in the highly congested UK mobile market, based on a low marketing investment model. Cutting marketing and customer services costs, the company turned its community into a reliable, fast and free customer and marketing service, rewarding its members for practically running certain aspect of the business.
The small startup company is challenging the traditional telecom business approach. According to the company founders, since its launch, giffgaff’s revenue has increased eleven fold since its launch in 2009, while its customer base has increased sevenfold.
How can a small mobile operator charge less than long-established telecom incumbents? To find out read our case study: – “giffgaff – replacing traditional telecoms business model with co-created products and services approach.”
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