Wikipedia founder backs IPO

Selling customers pay monthly and pay-as-you-go mobile contracts is hardly unique. But what if your mobile operator said it would pay 10% of your bill to a cause of your choice without any additional cost to you. Well, that's the interesting idea being tested by The People's Operator (TPO), which listed on AIM Thursday. And with the backing of Wikipedia founder Jimmy Wales, you wouldn't bet against them.

A placing of TPO shares at 130p has already raised £20 million. That money will bankroll development of a viral, on-line global community platform which it is hoped will drive subscriber numbers from 12,000 at present to 1million over the next four years.

That might not be as ambitious as it sounds. Giffgaff, which launched in 2009 and is run by O2's Spanish owner Telefonica, has over 1 million subscribers and is one of the fastest-growing networks around. And TPO has already teamed up with EE and American telecoms giant Sprint. A US launch is scheduled for next spring.

Of course, key to TPO's appeal is the charitable nature of the business. Sign up to a TPO mobile contract and a tenth of the bill will go to a charity which you can nominate on the company's website. There's no catch, either. Its deals are competitively priced as TPO keeps costs down, mostly by avoiding expensive marketing campaigns, the kind that big mobile operators spend tens of millions of pounds on every year. Fixed costs are low, too, as most backoffice work is outsourced

But how will the company grow the subscriber base? Through viral networking and online communities is the plan. That, rather than profitability, is the objective for the next couple of years. And it's the charities themselves that should generate a lot of interest. Biggies like the NSPCC and The Big Issue Foundation are already on board.

Jimmy Wales is currently busy designing a platform that will let subscribers see what they've contributed to charity and tweet their good dead. It will be up and running early next year. That will precede a US launch in March or April.

While subscribers will not be able to buy the latest phones from TPO, or any handsets for that matter, a system being used by large operators may make sense for TPO, too. That would mean bringing in a third-party finance house to fund the purchase of handsets to sell as a package to customers. That might take a few years to set up.

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