Feeds

Giffgaff says some subscribers yakked for 9 days a month

Financial reality hits Web 2 network

Top three mobile application threats

It was harsh economics, not popularity, that put the kibosh on the unlimited tariff from giffgaff, as some customers were costing the company £500 a month.

Not that giffgaff was keen to admit the obvious motivation behind the shelving of its £30 "goody bag" which allowed unlimited calls and text messages as well as the unlimited data common to all the bundles. When the removal was announced The Gaffer said it was because the bundle had proved unpopular, with less than 5 per cent of giffgaff customers taking advantage of it.

Customers were quick to point out that limited appeal is no reason to pull a profitable tariff, and The Gaffer's arguments that it still cost the company in terms of promotional activity and web space fell on deaf ears. It was pretty obvious that the unlimited goody bag should remain on offer if it was making money for giffgaff.

Which, of course, it wasn't. In an updated blog The Gaffer admits that some customers were using more than 13,000 minutes a month (that's more than nine continuous days of conversation), and that the average was over 5,000 minutes (three and a half days). Assuming a termination rate* of four pence a minute (to mobile numbers) then 13,000 minutes costs giffgaff £520, obviously unsustainable for a £30 bundle.

This is why most operators have a fair use policy, so they can cut off customers taking the piss. But giffgaff is ideologically opposed to fair use, so pulled the tariff instead.

The problem, for a network that wants to be open, is that those figures are worth a lot to the competition; any operator considering a similar offering now knows the average use and can price appropriately, which is why giffgaff didn't mention them earlier.

The Gaffer has now opened a discussion on whether the company should start offering a bundle with capped minutes, but being forced to reveal your hand to your competitors is going to make life even harder for the network run by its customers. ®

* The amount the caller's operator has to pay the callee's network for routing the call.

Combat fraud and increase customer satisfaction

More from The Register

next story
Virgin Media so, so SORRY for turning spam fire-hose on its punters
Hundreds of emails flood inboxes thanks to gaffe
A black box for your SUITCASE: Now your lost luggage can phone home – quite literally
Breakfast in London, lunch in NYC, and your clothes in Peru
AT&T threatens to pull out of FCC wireless auctions over purchase limits
Company wants ability to buy more spectrum space in auction
Turnbull leaves Australia's broadband blackspots in the dark
New Statement of Expectations to NBN Co offers get-out clauses for blackspot builds
Facebook claims 100 MEEELLION active users in India
Who needs China when you've got the next billion in your sights?
Facebook splats in-app chat, whacks brats into crack yakety-yak app
Jibber-jabbering addicts turfed out just as Zuck warned
Google looks to LTE and Wi-Fi to help it lube YouTube tubes
Bandwidth hogger needs tube embiggenment if it's to succeed
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.