The Peoples Operator Regulatory News (TPOP)

The information contained in this announcement is restricted and is not for publication, release or distribution in the United States of America, Canada, Australia, Japan, Republic of Ireland or Republic of South Africa

4 December 2014

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."

For further information

Notes to Editors

TPO's Strategy

The strategy of the Group is to maintain a low fixed-cost base, small staff numbers and lower levels of advertising and marketing expenditure than its competitors. Because TPO operates as an MVNO, the Directors do not believe that the Group will be exposed to the high infrastructure costs and large capital investment charges that traditional mobile operators can incur. The Directors believe that this strategy is scalable into new markets around the world. The Board intends that the Group will only operate in countries and regions that offer competitive wholesale mobile network bandwidth prices. Once network agreements have been concluded with local network operators, subscriber acquisition and revenue growth can be driven quickly and at a low incremental cost.

In April 2014, TPO entered into discussions with Sprint with the intention of entering into an operating agreement to provide a fully integrated mobile phone service across the USA. Sprint is the third largest wireless network operator in the USA with over 53 million customers. In September 2014, a long term operating agreement was entered into and it is anticipated that the Group will commence trading in the USA from Spring 2015 subject to TPO having received the relevant US regulatory licenses.

Following expansion into the USA, the Directors have identified a number of jurisdictions for future expansion of the TPO offering: Mexico, Brazil, Asia and Europe. The Directors believe that the potential for customer acquisitions in these regions is significant, with established MVNOs and minimal structural barriers to entry. In accordance with this strategy, over the next 18 months the Group intends to negotiate a series of operating agreements with established network operators in these regions with a view to replicating the model in an increasing number of countries worldwide.

Board of Directors

Andrew Rosenfeld, Chairman 

Andrew was the founder, former Chief Executive and Chairman of Minerva plc, the property investment and development group. The company was founded with an issued share capital of £70,500 and when Andrew stepped down as Chairman in 2006, the Company was amongst the FTSE 250 and valued at over £600 million. Since Minerva, Andrew has been an active private investor. 

Jimmy Wales, Executive Director of Strategy and Digital Community 

Jimmy is the founder of the free online encyclopaedia Wikipedia which is read by more than 500 million users every month and has 18 billion page views. He is a board member of the Wikimedia Foundation a non-profit charitable organization. Jimmy holds a degree in finance from Auburn University and a Masters in finance from the University of Alabama.

Mark Epstein, Chief Executive Officer 

Prior to co-founding TPO, Mark co-founded and ran Mass1 Limited, where he built the business into a leading UK campaign agency, working with organisations including Channel 4, and charities such as DEC (Disasters Emergency Committee). Before starting Mass1 Mark held senior management positions in the mobile and creative industries.

Matt Lea, Finance Director

Matt joined TPO in August 2014 and leads the finance strategy and finance function. Matt is a CIMA qualified accountant with previous experience across a range of multi-national corporations, including Shell, BT and Capital One.

Gary Hughes, Non-Executive Director

Gary has had an extensive career in both the public and private equity markets. He is currently an operating executive at Apax Partners LLP where he primarily works on performance improvement for portfolio companies whilst also assisting with operational due diligence and providing interim management services to portfolio companies. Gary's experience includes various leadership roles including his position of Chief Finance Officer and Chief Executive Officer at Gala Coral Group and CMP Information respectively. He is currently a non-executive director of J Sainsbury Plc, SECC Limited and is Apax's representative on the board of Smart Technologies, Inc. in Canada. Gary holds a First Class degree in Economics and Econometrics from the University of Strathclyde.

Marisa Cassoni, Non-Executive Director

Marisa is a chartered accountant and finance professional with more than 35 years of experience. Her expansive career includes corporate finance, investigations and restructuring across a variety of industries and jurisdictions. She moved into commerce, joining the Prudential Group where she progressed through a series of senior finance roles to the position of finance director of the UK Division, following which she became the finance director of Britannic plc. Between 2001 and 2005 she was the finance director of the former Post Office (subsequently the Royal Mail), and joined the John Lewis Partnership in 2006 as their finance director, before retiring in 2012. She is currently a non-executive director at AO World Plc, Skipton Building Society and GFI Group, Inc.

Christian Hernandez Gallardo, Non-Executive Director

Christian has over 17 years of operating experience in technology companies, developing businesses internationally. Prior to being a co-founder of White Star Capital, Christian worked at Facebook where he led the international expansion of the company's Business Development, Platform and Gaming Partnerships groups. Prior to Facebook, he held leadership roles for three years at Microsoft, specialising in smartphones and mobile business development, before moving onto Google and fulfilling the roles of Head of New Markets and Head of Distribution Partnerships. Christian is on the board of Glow Digital Media, Keyme, eLife Sciences Publications and is a Board Observer at Bloglovin'. Christian holds a degree in Economics from Duke University and an MBA from The Wharton School.

Global Advisory Board

TPO is forming a global advisory board to provide guidance and strategic advice to the Board. The first member of the global advisory board is Sean Parker, an entrepreneur who co-founded the file-sharing computer service Napster and served as the first president of the social networking website Facebook, Inc. He currently serves on the board of directors of Spotify and is an active investor and philanthropist.