MVNO giffgaff has spent £9m improving its systems, which will accommodate its growth during the next 18 months.
The cash has been invested in the company’s network charging systems, which will increase its capacity threefold. CEO Mike Fairman said the money had been spent to stay ahead of planned growth as giffgaff realised earlier this year that it was running out of capacity. The company has invested in its first television advertising campaign this year, sponsoring programmes on Channel 4 and E4. Previously it has relied on its customer base to help growth.
Fairman said: ‘2012 has been a really good year. We took a decision to invest in extra marketing, although that was not to undermine the efforts of the community, which has been doing a great job of spreading the word.’
He added that while it planned more marketing activity during the next 12 months, he said above-the-line advertising would not completely replace its community-based marketing. He said: ‘There’s a speed at which it is sensible to go. If you drive your marketing too hard and awareness too fast, you can outpace the word of mouth. We do think these things work best hand in hand. You won’t be turning on your TV and seeing an ad campaign from us all the time. We feel we have got the balance about right.’
The company relies on its user base to answer the majority of its customer queries, and Fairman said its recently launched iOS app, which can be used to check balances, came from one of its community. He said: ‘The interesting thing is the first version of the app was written by one of our members. He put it on the App store through his own initiative. A number of members also wrote their own versions but his was seen as the most helpful so we asked him to create an official version and paid him to build it.’ An Android version is currently being worked on, with no plans as yet for a Windows Phone or BlackBerry app.
Giffgaff is owned by Telefónica and runs on O2’s network in the UK. Fairman said work was under way on developing a 4G offer for when O2 launches its own next-generation proposition in 2013. He said: ‘O2’s network will be enabled from next year and we need to make sure we get that right. It’s the biggest focus for us at the moment. We expect that, if it doesn’t launch at the same time as O2, it will be shortly after O2 launches its 4G offer.’
Fairman said around one third of its customers had signed up to its recurring goodybags offer since it was launched in June. Typically, giffgaff sell monthly bundles of minutes, texts and data but the recurring offer automatically renews the bundle each month, although a customer can cancel at any time. He said: ‘An interesting fact about the market is that prepay is declining. For us that’s obviously an issue so we need to make sure our offer is relevant to those former prepay customers. Goodybags is a core part of the offer for us to do this.’
Editor: Graeme Neill