Phone Co-op Wins Enterprising Solutions Award

When The Phone Co-op entered the Enterprising Solutions Awards two years ago
it watched someone else walk off with the top prize. However, just being
shortlisted spurred it on to enter again and this time it was successful.

Vivian Woodell, the chief executive and founder of the Chipping Norton-based
operation, had a background in the cooperative movement rather than
telecommunications when he decided to set up the business about ten years
ago to supply telecoms and internet services.

“I was working in Central and Eastern Europe creating resources for people who
wanted to start or expand coops and we had high phone bills,” he says.
International calls in the 1990s were costly but Woodell was able to find
cheaper providers. They explained that they bought the calls wholesale from
another carrier and he thought if they could do this so could he.

The initial idea was to sell cheaper calls to nongovernmental organisations
(NGOs) to allow them to save money. The concept of reselling minutes evolved
along with the market and offerings were expanded. The business’s initial
name was the Social Economy Telecoms Cooperative, or Setco.

Quite quickly the market changed so the coop was able to clinch deals on
national and international calls. It became apparent that consumers as well
as NGOs would be interested.

Woodell negotiated buying telephone minutes from carriers and ran his
operation on a very small scale, almost as an experiment, from his spare
room to see how viable it would be. The idea was to take any profits and use
them to launch a full telephone and internet service. It took two years to
secure all the agreements with suppliers and in June 1998 he gave up his
previous job and focused on the telecommunications business full time.

Structurally the idea was always to stay mutual, regardless of external
pressure. “Initially we restricted membership either to cooperatives and
charities and people who were associated with them,” Woodell explains.

This was for pragmatic and political reasons; there had been a hostile attempt
to demutualise the coop and many building societies had seen their mutual
status removed. The issue gradually went away and the coop’s constitution
was amended to make demutualisation difficult. Membership became open to
anyone and currently about half the customers become members.

In 1999 the name changed to The Phone Co-op and the legal status switched from
a limited company to an industrial provident society. This status has proved
an advantage during the credit crisis.

“People see us as a safe haven and we have seen our share capital increase
quite a lot over the past few weeks,” Woodell says. He is under no
illusions, however, that his business will suffer as the economy suffers.

Entering the Social Enterprise Awards for a second time was an easy decision.
He says: “We feel that we are one of the leading social enterprise companies
in the country, having grown from nothing to a reasonable size over ten
years. One of our key markets is the social enterprise sector, so it can’t
do any harm to be recognised there,” Woodell is keen to use the £10,000
prize money to launch an umbrella specialist telecommunications group to
bring together cooperatives in the international telecoms industry. The idea
is to help them to make regular contact and to support one another.

He hopes to launch the umbrella body at the International Cooperative
Alliance’s conference in Glasgow next year.