Powered and owned by O2, GiffGaff is an MVNO entirely unlike any other. Not only does it pay out cold, hard cash to its members for their support (one enterprising Birmingham lad made £13,000 last year alone), but the company puts its current userbase first, even stopping advertising for several months when they feared they were growing too fast. We pinned head-Gaffer Mike Fairman down recently, to give him the Giz Meets treatment:
GiffGaff was born out of an idea induced by a web 2.0 conference in the US all about what can be achieved with solid web communities. Gav Thompson, one of O2’s brand strategists at the time, had a brainwave on the flight back home: “Why can’t a mobile company do that? Work in a more joined-up fashion with customers, to the mutual benefit of the company and the customers themselves?”
As Fairman says, “the key word in that sentence is mutual,” because unlike most mobile networks, GiffGaff is definitely a two-way street. Its very name, in a typically British fashion, is an old Scottish word for mutual giving.
GiffGaff kicked off in April 2009 behind closed doors, and launched in beta on the 25th of November that year. It started sending out free SIMs in February the next year, while its characteristic “goodybags,” which form the basis of GiffGaff’s appeal, hit the network in April 2010. From there the company grew with the support of its members, shepherded by “Educators” – GiffGaff’s moderators of sort who manage the community and “educate members on how to behave” on the company’s forums.
Although GiffGaff is owned by O2, its infrastructure is all its own as far as possible. The systems that deal with new customers, their data and backend duties are built and operated by GiffGaff, but naturally there are a few overlaps, just like with any MVNO. GiffGaff’s low-cost strategy means it runs with a skeleton crew; there are only 21 full-time staff including Fairman, with the rest of the operation relying on its members -- for better or worse.
Fairman is a long-serving O2 man. He was instrumental in O2’s launch of its online retail offerings, which took the network into uncharted territory. He also took charge of O2’s home broadband push, which was launched off the back of the company’s purchase of Be Unlimited. He later went on to become O2’s head of new product development, which put him in the perfect position to take on the challenge of setting up an entirely new and innovative way to run a mobile network.
A bit like one of our previous interviewees, Ruslan Kogan, Fairman’s quite ambitious in his aims: “I’d like to change the way every company on the planet operates.” The self-called "Gaffer" thinks that openness is the key to good business in the future:
“GiffGaff is the most customer-centric business in the world. There are very few things we do that we don’t talk to our customers about.”
I have to agree with him, in that I would like all businesses to be open about what they’re up to – it’s certainly a refreshing idea from the closed-off nature of quite a lot of the world’s top companies, especially mobile networks. There is such a thing as too much openness though, and I wonder how a really open business like GiffGaff could ever dominate a market place. Though if you think about it, O2 doesn’t really want GiffGaff to dominate, just to collect customers that wouldn’t ordinarily join the O2 mothership.
Having been set up on the principle of openness and mutual benefit, GiffGaff relies heavily on its customers. Its “members” help out; spread the word; do some tasks like sending out SIM cards, and handle support issues in the forums – they generally form the lifeblood of the network. In return, proactive users are rewarded and I don’t mean with just minutes or texts – cold, hard cash is up for grabs. In fact GiffGaff handed helpful members of its community over £1 million last year, with one particularly proactive 17-year-old from Birmingham grabbing himself some £13,000: “He’s a fantastic salesman by all accounts, and he spends a lot of time outside the Bullring in Birmingham selling people GiffGaff. He’s saving up to put himself through university.”
Of course, it’s not just the proactive users that benefit from GiffGaff’s community-run model – average Joe who does nothing but make calls still gets cheap tariffs without a contract. It’s one of the reasons people love GiffGaff so much; it’s arguably one of the cheapest commitment-free network in terms of bundles of data, texts and minutes.
Having your own infrastructure as a small company means you have control over most of your operation, but it came to bite GiffGaff in the arse at the beginning of 2012. Essentially the network grew too fast, meaning its systems buckled under the strain, leaving customers without service for weeks. The last round of issues were due to a memory leak in one of the company’s servers, with Fairman telling us that "there are times when you code stuff up, you just don't know how it's going to perform until it's stress-tested."
A series of upgrades were then put in place to stop it happening again, which is the logical step. However, GiffGaff took the relatively strange decision for a growing business to stop advertising for 2.5 months to reduce the influx of new customers and ease the load on its systems. All the backend upgrades are now in place, which more than doubled the network’s capacity and allowed it to launch BlackBerry services just recently – hopefully that’s the end to GiffGaff’s growing pains, at least for the time being.
With all the buzz around 4G in the UK right now, it’s an obvious question to level at any mobile network. Of course, as an MVNO, some things are out of GiffGaff’s hands, being solely reliant on O2 to roll out the infrastructure. Luckily for GiffGaff, O2 seems pretty forward-thinking about these kinds of things as our involvement in the O2 4G trails has shown.
So it’s not a case of if GiffGaff will have the ability to offer LTE to its customers, but when. Fairman explains that he has every intention of introducing a 4G service. As a network that doesn’t sell handsets of its own, it relies on the customer providing the handset. Therefore the opportunity for rolling out an LTE service relies heavily on the second-hand or unlocked handsets available at the time, claims Fairman: “we’ve just got to pick a point where it’s sensible to add it in.”
GiffGaff is the network for people who don’t want to be tied down, but also want the benefit of contract-style pricing and bundles. It offers some of the most competitive prices for data, minutes and texts available in the UK today, but it’s not the perfect geek’s network.
“Unlimited” data there may be, but GiffGaff operates an abuse policy – a fair use policy by any other name. Unfortunately tethering is stipulated as an abuse, which is one of the reasons I’m not personally with GiffGaff. There are data-only plans, but they’re separate. So no, it’s not really unlimited data.
Still, with the promise of 4G on the horizon; a customer reward scheme that deals out cash, and commitment-free prices not to be sniffed at, GiffGaff’s certainly worth considering if you’re up for switching networks and are savvy enough to make do with forums for support.