The People's Operator

The People's Operator LLP

Type	Limited Liability Partnership
Industry	Mobile Phones
Founded	2012
Headquarters	London, United Kingdom
Key people	Mark Epstein (CEO), Jimmy Wales (Chairman)
Products	Mobile Telephony
Website	thepeoplesoperator.com tpo.com

The People's Operator (or TPO Mobile) is a mobile virtual network operator that provides mobile phone services in the United Kingdom and the United States via the Three^[1] (though TPO had initially selected the EE company) and the Sprint networks, respectively. It was launched in 2012, with the stated aim of being an ethical mobile network operator. TPO asserts that the service gives customers the opportunity to support their selected causes and receive updates on how their money is being spent, while businesses can fulfill their corporate social responsibility commitments.^[2] The company's stock dropped nearly 90 percent in value in its first year and a half.^[3] TPO suffered reputational damage in 2016 after a transfer of customers from 3G to 4G service led to many of them waiting for weeks without phone service.

History

Start-up

TPO was launched on 19 November 2012. At launch, it was owned entirely by its three co-founders, Andrew Rosenfeld, Tom Gutteridge and Mark Epstein, with Rosenfeld being the primary financial backing for the company.^[4] The organisation has been based in Shoreditch, London. It was established with the stated aim of being an ethical mobile phone operator.^[5] At launch, Rosenfeld was the Chairman, with Gutteridge and Epstein as vice-chairs, and Alex Franks as the chief executive.^[6][7]

Partnership with Jimmy Wales, going public, and leadership change

On 20 January 2014, TPO announced that Jimmy Wales had joined the organisation on a £250,000 annual salary^[8] as co-chair of the board, and had "taken a strategic stake in the business." Wales was quoted as saying that "TPO has huge potential for viral growth and the more it grows, the more money will pass to the people and communities that need it."^[9][10] TPO announced in January 2014 that it is aiming to launch its services in the United States and Europe within the next 12 months.^[9][11] In October 2014, the company announced that it intended to list publicly on London's Alternative Investment Market. It was estimated by Oscar Williams-Grut that the company could be worth ₤100 million upon its initial public offering.^[12]

On 8 February 2015, Rosenfeld died after a short illness.^[13] Days later, Wales was appointed by the board as Rosenfeld's replacement as Executive Chairman.^[14] In October 2015, it was announced that Rosenfeld's son James had been appointed as a non-executive Director of the firm,^[15] but less than 13 months later, James resigned from the position.^[16]

United States expansion and collapse in share price

Line chart showing the fall in value from £1,30 to less than £0,12. Shareholders lost nearly £90 million.

TPO officially launched in the United States on 21 July 2015.^[17][18] Since its inception, the service runs as an MVNO on top of the Sprint wireless CDMA network, and later also on the T-Mobile US wireless GSM network, which commenced the week of 21 March 2016. TPO offered prospective US customers a $32-per-month option with unlimited talk time and text messages and 2 gigabytes of data.^[19][20]

In late September 2015, the company reported its financial performance through the first six months of the year, revealing it had significantly widened its pretax loss to £4,400,000, from a year-earlier loss of only £600,000.^[21]

Between October 2015 and March 2016, the company saw a collapse in its share price from 130p to below 30p.^[22] The Times ran a June 2016 story noting that it has dropped nearly 90 percent since its initial offering.^[3] By November 2016, the financial numbers were "not adding up" for TPO, with the company's directors and major shareholders previously indicating a desire to inject £1 million into the company if other shareholders were prepared to do the same. But that proposal was vetted at 16.7 pence per share, then the stock lost another 60% of value, "slumping to 6.5p, as the company admitted defeat".^[23]

Services

As a mobile virtual network operator, TPO does not own any network infrastructure, but instead uses the Three (previously EE) network to provide its services in the United Kingdom^[4] (although it did not initially disclose which network it would use),^[24] and the Sprint and T-Mobile networks in the United States. It uses the virtual network aggregator Transatel to connect to the EE network.^[7]

Since it was launched, TPO has offered pay-as-you-go services.^[4] The organisation does not have stores, operating entirely online, but it has an in-house call centre in the UK.^[5]

At launch, the costs of calls and texts were deemed competitive with other mobile phone operators, costing 12.5p/minute for calls (with free calls between TPO users), 7.5p/text and 12.5p/MB for data.^[6] It was noted that the company may need to offer a better data rate,^[24] which was later halved.^[25] TPO started offering monthly contracts in April 2013, at prices between £5 and £25.^[26][27]

The People's Operator announced that it would be moving to the Three UK network in the first quarter of 2016, which would give its customers LTE 4G services.^[28]

The People's Operator Foundation

Initial plans were for 25% of any TPO profit to have gone to The People's Operator Foundation, which was an independent group that would have funded charities and community groups in the UK. However, the company has never been profitable, and the Foundation was dissolved at the end of 2014.^[29] TPO Foundation was a registered charity,^[30] and as of 2012 the trustees were Sir Christopher Kelly (chair), Kevin Curley, and (the now deceased) Andrew Rosenfeld.^[7]

In addition, customers can optionally designate 10% of the amount they spend on calls, texts and data^[4] (pre-VAT)^[5] to a specific charity or community group. However, according to company filings, less than 3.8% of gross income (not 10% as advertised) is actually being distributed to nominated causes.^[31] This is likely due to a $50 minimum threshold for any charity to receive a disbursement.^[32]

Organisations that sign up new customers to TPO also may receive 10% of the customer's call, text and data spend.^[4] In order to not cost its customers more than other networks, this 10% comes from TPO's marketing budget.^[10]

TPO established partnerships with NSPCC, The Trussell Trust, Dimbleby Cancer Care and Childline prior to its launch,^[5][6] and by April 2013 it had partnered with the Children’s Heart Foundation, RE:generate and Caxton House, and was planning a partnership with The Big Issue Foundation.^[26][27] In September 2013, the Labour Party also announced a partnership with TPO; according to Wired UK, party members are encouraged to "sign up to the mobile operator in order to give 10 percent of their bill back to the party."^[33] Unite the Union, a British and Irish trade union, has a similar TPO partnership.^[33] As of January 2014 TPO had also partnered with Islington Giving, and Wales hopes that the foundation will also support Wikipedia in the future.^[10]

TPO Community

In 2015 The People's Operator launched its TPO Community, an advertisement-free social network.^[34] The community offers users a space where they can talk about the charities and causes they support and donate to the causes directly. The Community website was also supported in a press release by Jimmy Wales ^[35][36]

Criticism

In November 2013 The Daily Telegraph reported that Unite's deal with TPO included free phone calls and texts for members of its strike committee and that this capability was being used as a part of a "campaign of intimidation" against bosses at the Grangemouth Refinery.^[37] In November 2013, Rosenfeld, a Labour Party donor, denied to The Times that The People's Operator "had aided Unite in dirty tricks campaigns during industrial disputes."^[38]

Shortly after the December 2014 initial public offering raised £20 million of new money for TPO, the company's stock was reviewed in The Telegraph, which calculated the firm's value at less than £1 million, or a mere 1.3 pence per share, yielding an "Avoid" rating. However, the review noted that House broker finnCap disagreed, placing a 250-pence target price on the shares, and expected TPO to generate £98 million revenue and pre-tax profits of £17.1 million by the end of 2016.^[39]

The company's transfer of customers from 3G to 4G service was described as "omnishambles" in a report about how hundreds of customers had been forced to wait more than three weeks without phone service, and frustrations multiplied by "hour-long phone calls that are not answered, emails and Tweets being ignored and comments on TPO’s Facebook page being deleted".^[40] Wireless industry reporter Kezia Jackson, interviewed by BBC Radio 4, stated that neither she personally nor the head of another MVNO (The Phone Co-op) had ever heard of any other phone network having such difficulty converting customers to a 4G signal.^[41]

TPO has continued to come in for harsh criticism - from its customer base and former-customer base - on consumer websites such as TrustPilot and Choose.net, for the low standard of its customer service and controversial changes to customer contracts.^{[42] [43]}

References

External links

• Official website
• TPO Community