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The People’s Operator plc – Admission to AIM and First Day of Dealings

by david.nunes

The People’s Operator plc

 (“TPO”, the “Company” or the “Group”)

Admission to AIM and First Day of Dealings

The People’s Operator (AIM: TPOP), the cause-based commercial mobile virtual network operator (“MVNO”), is pleased to announce that admission takes place and dealings in its ordinary shares of £0.0005 each (“Ordinary Shares”) commence at 08.00 a.m. today on the AIM market of the London Stock Exchange (“Admission”) with the TIDM “TPOP”.

The Company was founded in 2012 and currently offers customers pay monthly (“PAYM”) and pay-as-you-go (“PAYG”) mobile contracts. These contracts are competitively priced and allow users to direct 10 per cent. of their monthly bill to a cause of their choosing at no additional cost to themselves. In addition, The TPO Foundation, a UK registered charity, will receive 25 per cent of the UK trading profits generated by The People’s Operator LLP. A similar structure is proposed to be adopted in other countries as TPO expands globally, starting with a launch in the United States in 2015.

The Company’s Admission Document can be found at https://www.thepeoplesoperator.com/InvestorRelations

Admission details

·         The placing has successfully raised approximately £20 million, before expenses, through the placing of 15,384,616 Ordinary Shares at 130 pence per Ordinary Share with institutional investors (“Placing Price”) (the “Placing”)

·         The number of Ordinary Shares in issue on admission will be 77,099,059

·         The net proceeds received from the Placing will be primarily used to invest in the development of a viral, on-line global community platform and to provide working capital

·         finnCap Ltd is acting as Nominated Adviser and Broker to the company and acted as Sole Bookrunner to the Placing

Key Strengths

The Directors believe that the Company has the following key strengths:

·         Significant potential for growth: by 2016, the size of the global mobile phone market is predicted to reach 8.5 billion subscriptions (source: Portio Research). The Company’s forecasts take into account currently only achieving up to 2 per cent. penetration of the UK and US markets by 2021, which at present have approximately 83 million and 335 million mobile subscriptions respectively. As outlined above, the Directors believe that the US is an attractive market and will act as a springboard for its planned global growth. The Company plans to launch in a number of other territories as soon as practicable.

·           Distinctive and differentiated sales proposition: TPO is believed to be the world’s first cause-based commercial MVNO with a strategy of customer acquisition through viral networking and online communities. The Directors believe that TPO is the only caused based alternative in the mobile sector that will have wide customer appeal and be offered on a global scale. There is a uniquely symbiotic relationship between the Group and its customers, based on the increased money distributed to causes along with the growth in TPO’s profits.

 ·         First mover advantage: the Company has developed, commercialised and launched a business model that the Directors believe is markedly different to those of its competitors. The Board considers that the Company has the benefit of first mover advantage in both its sales proposition, and its approach to customer acquisition through viral marketing. The commercial, legal and technological complexities in creating the business, as well as the expertise in online communities and viral networking of Jimmy Wales, means that this would be difficult to replicate in the short term. Traditional mobile network operators are restricted by existing revenue models, infrastructure costs, and dividend structures which the Board believe would be difficult to retrospectively adjust.

 ·         Robust financial model: the Company’s business model is based on low fixed costs, minimal advertising, and the development of an online viral cause based community. The Board therefore intend to ensure that the cost of customer acquisition is lower than its competitors and industry standards. This model can be efficiently repeated and scaled as new markets are entered around the world. The Board believes that subscribers will remain loyal to the network due to their belief in chosen causes, stay connected via the online community, with the combined effect of continuing to subscribe to the network for longer periods than usual in the industry.

Andrew Rosenfeld, Chairman, commented:

“We are delighted to have received such strong demand from high calibre investors, recognising TPO’s compelling proposition as the world’s first cause-based commercial mobile virtual network operator with a strategy of customer acquisition through viral networking and online communities.  

“The Group’s admission to AIM and the placing represents a significant milestone, giving us a strong platform from which to initially roll out our strategy in the world’s largest mobile phone market, the US, and we look forward to providing shareholders with further updates on our progress.”

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