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O2 launches democratically-minded MVNO

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O2's new MVNO, giffgaff, claims it will be run by its customers to reduce costs and reward loyalty. Assuming it gets any customers, that is.

The new company will offer SIM-only connections hosted on O2's network, but reckons it can reduce costs by getting customers to provide each other's technical support and paying them in rebates to vote on business decisions or recommend the service to friends and relatives.

“We know that people-powered projects like Wikipedia can often out-do the efforts of established businesses", explains CEO Mike Fairman "so it seemed like a good idea to encourage that behaviour in our members". We're not sure which established business is out-done by Wikipedia, but Mr. Fairman reckons costs can be cut by being getting customers to do the work:

"As a people-powered network we’ll avoid cost in many areas of our business, so we can pass on those savings to all our members in the form of lower prices."

That would be operating without call centres or technical support, but those are insignificant costs compared to running a nationwide network, to which giffgaff will have to contribute as any other MVNO.

Just to make sure giffgaff ticks all the boxes, the company also claims to be more environmentally sound than the rest, on the basis that it's cheaper and therefore consumes less resources - which is an interesting argument with more holes in it than we have the space to expound on here.

But that's not the only problem with giffgaff: Wikipedia might be a useful resource but no-one would argue that it's efficiently organised. We can't help wondering exactly what kind of decisions giffgaff is going to put to a customer vote, and if the whole operation isn't just another attempt to cash in on the socially-networked crowd.

We won't know that until the operator launches towards the end of 2009, but it should be easy to tell if giffgaff really is people-powered - just look for the network run by the Tooting Popular Front. ®

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