Swedish Startup Space

Wifog pivots – introduce advertisements to lower your mobile bill

Written by on October 5, 2015

The cheapskate’s favorite mobile carrier is once more prepared to take on the fight with Telia and Tele2.

It has been a tough year for mobile operator Wifog, whose business idea has been to allow customer view advertisements instead of paying for mobile surf.

The company was almost bankrupt at the end of 2014. After reconstruction of the company, with a number of new issues of shares at a combined total of around $6 million and add to that a listing on First North, the company is back on its feet.

Wifog are now launching a new version of their service. The carrier’s CEO Peter Håkansson says that the company has tweaked the business model.

“We realized during last year that we would never make ends meet while providing all users with free mobile internet. Our revenues on the advertisements were simply too small. We have changed the model now. The customers pay $4.70 per month but they can lower or completely be rid of the charge if they view advertisements or shop within the service”, he says.

Wifog has – beside possibilities to view commercials – built an e-commerce platform inside their service. If a customer buys food through the Wifog-service from Linas Matkasse for instance, the customer’s mobile bill becomes lower.

This, since Wifog receives a fee when the company is marketing the grocery bags within the service.

Peter Håkansson says that the goal from now on is to increase the number of users with 5.000-10.000 a month.

“We paused our own marketing while raising money and worked on the stock exchange listing. Now that we’ve taken that across the goal line, we will proceed to be more visible again, mainly on social media”, he says.

Wifog differ from other large operators like Telia in such that the company does not have its own infrastructure for mobile data. Instead, the company purchases data from trade colleague 3 – a model reminiscent of Google’s broadband service Project Fi.

Wifog have 55.000 active users today, who still pay 0 per month for their contract.

Peter Håkansson says that the existing customers get respite another month or so before they have to pay $4.70 per month (provided they do not erase their bill with shopping and advertisement).

“We are very anxious to keep our existing users happy, since they also are our ambassadors”, he says.

You don’t think they will be grumpy? They became customers with a promise of surfing for free.

“Emotionally I can understand someone reacting like that. But rationally it would be wrong of them to changed operator. We are still the cheapest by far”, Peter Håkansson says.

Another potential problem for Wifog is the target group. People who can consider watching advertisements in exchange for not having to pay $4.70 a month are probably not the most well off clients.

It can scare off advertisers who prefer target groups with great purchasing power.

Peter Håkansson says, however, that it is not correct to assume Wifog users have weak purchasing power.

“Our target group is mainly people around 30 years old who live in a big city. They are not a target group with weak purchasing power, instead they use Wifog since they are rational and want the cheapest alternative”, he says.

According to the Wifog CEO, the goal now is to become one of the largest mobile operators in Sweden and then start expanding abroad.

“We are counting on reaching break-even at the end of this year with our main business. After that we will probably still operate at a loss for some time, but that is because of investments in marketing which we can choose to do, or not” Peter Håkansson says.

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