2. The need for a new approach
What’s changed?
The growth in smartphone usage in the UK over the past few years has caused a
revolution in how we all use our phones - and the internet has become much more
important to us when we’re on the move.
Over three quarters of giffgaff members now own a smartphone and the average Mobile
Internet usage of a member has nearly doubled within the past year with no sign of
slowing up.
How does that affect giffgaff?
giffgaff are an MVNO, which means that we do not own our own mobile network.
Instead, we pay wholesale rates to O2 for every MB of data which is used on their
network.
As we all start using the Mobile Internet more and more, giffgaffs wholesale bills are
growing, creating an increasingly unsustainable situation.
We are now re-visiting our Mobile Internet strategy so that we can remain a sustainable
business whilst offering market leading value to our members.
3. Approaches to solving this issue
To reduce the financial impact of the increasing Mobile Internet wholesale costs, there are
two approaches which we can take.
Increase revenue Traffic management
Generate more income for giffgaff in
Enforce the terms and conditions of use
order to cover the additional cost of
and optimise network efficiency.
Mobile Internet usage.
Given the speed at which Mobile Internet usage is increasing, giffgaff needs to take steps in
both of these areas.
4. Increase revenue Traffic management
Generate more income for giffgaff in Enforce the terms and conditions of use
order to cover the additional cost of and optimise network efficiency.
Mobile Internet usage.
5. Increasing Revenue
To generate additional Mobile Internet revenues, we have been looking at ways that we
can update our Goodybag deals.
Most of you like to spend between £10 and £15 on your Mobile Internet Goodybags, so
we would like to focus on making a change in this area.
We have considered hundreds of different ways that we could update our Goodybag
deals, but following numerous research sessions we have now identified 3 options which
will help giffgaff to increase revenues, whilst remaining very good value.
One of these options will be delivered in November this year.
Now we need your help in deciding on the best option for our new Goodybag portfolio.
6. Competitor Review
Before you make your decision, here are some of the best Pay As You Go or 1 Month Rolling
Contract offers which are available on the market today between £7 and £12.50.
Plan Price Minutes Texts Mobile Internet
Allowance
giffgaff PAYG £10 250 off net Unlimited Unlimited
Unlimited on net
Three SIMO £12 300 3,000 1GB
Talk Mobile SIMO £12 400 3,000 750MB
Tesco SIMO £12.50 500 5,000 500MB
Talk Mobile SIMO £8 200 500 500MB
Virgin SIMO £10 250 2,500 500MB
Three PAYG £10 100 3,000 500MB
Virgin SIMO £7 125 2,500 250MB
Vectone SIMO £10 300 3,000 250MB
Vectone SIMO £7.50 150 3,000 150MB
You will see that giffgaff are the only network who offer unlimited texts and Mobile Internet
for only £10 per month. Please bear this competitor review in mind as you make your
decision.
7. Option 1:
What’s changed?
We have changed the price of the £10 Goodybag and made it £13.
How will this affect me?
If you usually buy the £10 Goodybag, then the cost of your Goodybag will increase by
£3, but you will still have access to an Unlimited Mobile Internet allowance.
How does this help?
The additional revenue from the £13 price point will help to pay our increasing wholesale
costs whilst still offering the best value Unlimited Mobile Internet package in the UK Pay As
You Go market.
8. Option 2:
If you exceed your Mobile Internet allowance then you will only be charged 2p/MB until the end of your Goodybag allowance.
What’s changed?
We have introduced a 750MB Mobile Internet allowance to the £10 Goodybag.
How will this affect me?
For the 80% of £10 Goodybag members who do not use more than 750MB in a month, this
change should have minimal impact unless you change your usage pattern. If you usually
exceed 750MB then the £15 Goodybag might be right for you.
How does this help?
This ensures that members who need Unlimited Mobile Internet are paying at least £15
per month, whilst a lower cost option remains available for members who are happy with
750MB.
9. Option 3:
If you exceed your Mobile Internet allowance then you will only be charged 2p/MB until the end of your Goodybag allowance.
What’s changed?
At the £10 price point, we have introduced a 750MB Mobile Internet allowance, but we
have also introduced a £13 Unlimited Goodybag.
How will this affect me?
For the 80% of £10 Goodybag members who do not use more than 750MB in a month, this
change should have minimal impact. However, if you usually exceed 750MB then we have
introduced a new Goodybag at £13 which still provides the best value Unlimited Mobile
Internet allowance in the UK.
How does this help?
This ensures that members who need Unlimited Mobile Internet are paying at least
£13, whilst a cheaper option remains open for the majority of members using under
750MB.
10. Increase revenue Traffic management
Generate more income for giffgaff in Enforce the terms and conditions of use
order to cover the additional cost of and optimise network efficiency.
Mobile Internet usage.
11. Improved Tethering Recognition: Expected: Q1 2013
What is tethering?
• Tethering means using a phones Wi-Fi hotspot functionality or a cable to connect a
mobile phone to another device, like a laptop or tablet, in order to use your Mobile
Internet allowance on the other device.
• Tethering is against the terms and conditions of use on an Unlimited Goodybag.
What is changing?
• A project has been kicked off which will improve our tethering reporting capabilities
and introduce an automated process for blocking tethering on the network.
How will this affect me?
• Unless you break the terms and conditions of usage by tethering your Mobile Internet
allowance to a non-mobile phone device, then you will not be affected.
What happens if I’m caught tethering?
• If a member attempts to tether, they will be identified immediately and re-directed to
a web page to explain how they are breaking the terms and conditions of use.
• The member will be blocked from using the Mobile Internet for a period of 30 minutes
to give them time to disconnect their mobile phone from any other devices.
• After the 30 minute period, the member will be free to use the Mobile Internet again
without having to contact giffgaff.
12. Video Optimisation: Expected: Oct 2012
What does video optimisation do?:
• Video downloads and streamed video can vary hugely in file size and image quality.
• Sometimes the detail being downloaded is suitable for a large screen, but exceeds
what can be shown on a small mobile phone screen.
• Video optimisation involves optimising streamed video content to suit the mobile
phone device which it is being watched on.
• This will usually reduce the amount of data being downloaded to a phone.
How will this affect me?
• Since the video is optimised to your device, you won’t notice any significant difference
in video quality, but you will notice some key benefits:
• Streamed videos will download faster to your phone
• If you have a limited Mobile Internet allowance, you’ll be able to watch more
video content before your allowance runs out.
13. Current delivery plan
September October November December Q1 2013
Community Consultation 1 month
consultation ends 20th Sept Comms to community
Goodybag &
Price & Tariff
Tariff revamp
Video compression
implementation
Traffic
Policies
Unlimited Internet
profile (tethering)
implementation
