2. The need for a new approachWhat’s changed?The growth in smartphone usage in the UK over the past few years has caused arevolution in how we all use our phones - and the internet has become much moreimportant to us when we’re on the move.Over three quarters of giffgaff members now own a smartphone and the average MobileInternet usage of a member has nearly doubled within the past year with no sign ofslowing 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 theirnetwork.As we all start using the Mobile Internet more and more, giffgaffs wholesale bills aregrowing, creating an increasingly unsustainable situation.We are now re-visiting our Mobile Internet strategy so that we can remain a sustainablebusiness whilst offering market leading value to our members.
3. Approaches to solving this issueTo reduce the financial impact of the increasing Mobile Internet wholesale costs, there aretwo 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 managementGenerate more income for giffgaff in Enforce the terms and conditions of useorder to cover the additional cost of and optimise network efficiency. Mobile Internet usage.
5. Increasing RevenueTo generate additional Mobile Internet revenues, we have been looking at ways that wecan update our Goodybag deals.Most of you like to spend between £10 and £15 on your Mobile Internet Goodybags, sowe would like to focus on making a change in this area.We have considered hundreds of different ways that we could update our Goodybagdeals, but following numerous research sessions we have now identified 3 options whichwill 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 ReviewBefore you make your decision, here are some of the best Pay As You Go or 1 Month RollingContract 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 150MBYou will see that giffgaff are the only network who offer unlimited texts and Mobile Internetfor only £10 per month. Please bear this competitor review in mind as you make yourdecision.
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, thischange should have minimal impact unless you change your usage pattern. If you usuallyexceed 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 £15per month, whilst a lower cost option remains available for members who are happy with750MB.
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 wehave 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, thischange should have minimal impact. However, if you usually exceed 750MB then we haveintroduced a new Goodybag at £13 which still provides the best value Unlimited MobileInternet 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 under750MB.
10. Increase revenue Traffic managementGenerate more income for giffgaff in Enforce the terms and conditions of useorder 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 monthconsultation ends 20th Sept Comms to community Goodybag & Price & Tariff Tariff revamp Video compression implementation Traffic Policies Unlimited Internet profile (tethering) implementation