Virgin Mobile launches in South Africa

Virgin Mobile South Africa becomes the sixth of UK entrepreneur Richard Bransons cellular operations, and has aspirations to take a 10% stake in the market.

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By  Alex Ritman Published  June 24, 2006

Virgin Group today launched its South African mobile operations, the sixth cellular business the company now has across the globe. Virgin Mobile South Africa is utilising the network of the country’s third operator Cell C, and hopes to gain a 10% market share within five years, becoming a serious player in a market dominated by Vodacom and MTN. “This is an aspiration,” says CEO Sajeed Sacranie, speaking of the 10% share. “We’ll need to take a third of that to be viable. But the intention is for the Virgin brand to be a significant present and we believe this figure is a sensible aspiration.” Virgin Mobile SA is hoping to gain popularity through the Virgin brand, already well known across South Africa through Virgin Active health centres and the Virgin Atlantic airline. Sacranie claims that there could be various promotional link ups between the various Virgin businesses. The new operator’s subscriber base may also benefit from number portability, which Sacranie says is on the horizon. “But there hasn’t been any firm commitment from the authorities. We obviously see number portability as a great opportunity, but we don’t predicate our business on it.” One of the main focuses for the operator will be customer care, and a transparent pricing structure, which Sacranie claims has so-far not been present in the South African market. “The tariff structures are very opaque, very difficult to decipher. There has been a culture of obfuscation in terms of what they’re making and how they’re making it.” As a joint-partner in the company, Cell C is believed to be receiving a 50% share of profits, but with both companies private, Sacranie does not wish to give an exact break down of the revenue sharing arrangement. “It’s a very straight forward joint venture between the two entities. It’s a very fair arrangement.”

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