We didn’t hear what the good folks of Qatar made of this remarkable show of solidarity with their plight at the hands of the evil Mobile Network Operators. It’s an interesting pitch – ‘You, the consumer, are being ripped off by the existing mobile operators and I am going to rescue you from them’ – only to do that, I need to borrow their network with all its patchy coverage and everything else you didn’t like about it.
South Africa remains something of an enigma for Virgin, as the reports of subscriber numbers tend to vary over time. Despite the equal-stake joint partnership having been launched sometime in 2006, reports of the actual number of subscribers yaw between 300,000 and 800,000. Cell C seem to have decided that this not the route to the mass youth market, and has recently set about offering their much more interesting hi-speed Mobile Broadband service.
And, of course, not all his ventures have worked out. Just nine months after launch Virgin Mobile pulled out of Singapore leaving network operator Singtel with a loss of about USD 25.6 million back in 2002. There’s always a silver lining and SingTel was able to say that it had not spent all of its initial USD 50 million investment.
Virgin Group and SingTel said at the time that the market was “too saturated to sustain an otherwise successful virtual network operator model. The subscriber net growth for mobile phone operators in the Singapore market has not been sufficient to sustain a new entrant in this mature market place.” Yet the cost of a good market study from TelecomsMarketResearch would have been a snip at just £312 for iemr’s 3Q10 Singapore Mobile Operator Forecast, 2010 – 2014 or Pyramid’s Singapore Intelligence Report for just £707.
Virgin Mobile began its operations in Singapore in October 2001 and had signed-up some 30,000 customers at the time of its demise, compared to the 1.8 million it had in the UK, and 220,000 in Australia. At the time SingTel had some 1.4 million subscribers, MobileOne Asia 900,000 and StarHub 350,000.
Prior to the closure, SingTel Mobile’s CEO Lucas Chow in March 2002 claimed that Virgin was not communicating its value proposition to the market well enough. Chow was quoted as saying: “The Singapore market is actually a very sophisticated market and the users have a certain set of expectations and when you do not deliver that set of expectations, it is very difficult to actually get new subscribers”. He noted that while Virgin Mobile’s strategy is “unique”, the company may need to brush up on getting its message across to the market.
So now Sir Richard is considering the UAE for Virgin Mobile’s next regional launch. Speaking to Arabian Business, Branson said: “We’re looking at other places including the UAE. The take up has been very good, and it’s been a good way to get our brand across to more people, so we’re trying to see how we can do it in more places across the region”.
Branson added that the Virgin formula was a simple structure that costs less and everyone understands how to use. He said that the Middle East was very good for the Virgin brand, with radio, shops and telecoms, and expansion was being actively considered.
Virgin Mobile is based in the UK, and has operations in Australia, Canada, France, India, Qatar, South Africa and the USA, and, of course, had that brief foray in Singapore. The earlier launches were proper joint ventures, although Virgin tends now to prefer to license its brand to mobile networks and does not take an equity stake in the operating company – as it did in Qatar. This change in the model caught Vodafone out, who had assumed that Virgin was entering the Qatari market as a true MVNO, rather than under a brand licensing agreement.
Indeed, this is a fascinating aspect of the Virgin business model, as the Virgin train operating company here in the UK (whose railway line also runs through the Chiltern Hills) pays Sir Richard the tidy sum of £1 million per annum as a straight royalty for use of the Virgin brand name.
No announcement has been made as to which of the two Mobile Network Operators in the UAE will be favoured with the Virgin brand: traditionally it would have been the smaller operator by subscriber numbers, du, who might have been the obvious candidate. But given that Etisalat has admitted in its recent bond prospectus that it is now feeling du’s heat, both might wish to woo Sir Richard.
Whatever, our friends at ‘Africa & Middle East Telecom-Week’ will be following developments. And the MVNO Directory 2010 is always an invaluable starting point for anyone tracking this market.
The only remaining ‘known unknown’ is how Sir Richard will elect to create a splash this time round…