The mobile operator describes the brand, Giffgaff, as a 'people-powered' service. It will use O2's network, but will not highlight the O2 brand.
Customers join by paying an initial £10 fee for a SIM on the Giffgaff website. They can then get money off their bills by recommending the service to others or making suggestions for product innovation.
Marketing for Giffgaff is being led by Kylie Evans, the former head of marketing for ITV's digital channels, who joined O2 this summer.
The launch campaign, created by Splendid Communications and Albion London, will have a digital and viral focus.
The Giffgaff name is based on Scottish word for mutual giving.
The business is being run from Beckensfield by CEO Mike Fairman, formerly head of broadband at O2.
The Giffgaff identity was created by SomeOne, with media strategy handled by Zenith.
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