Virgin Mobile UAE decoded
VM UAE might either change the UAE telecom landscape or make an exit like VM Qatar
The launch of Virgin Mobile UAE might change the UAE telecom landscape for the better by introducing competition; but only if it's here to stay long enough.
In an interesting turn of events for the GCC telecom market, EITC (Emirates Integrated Telecommunications Company), the ‘parent company' of Dubai-based telco du, has launched Virgin Mobile UAE (VMUAE) as its second mobile telecommunications brand.
Given the fact that Virgin Mobile is well-known globally as a leading MVNO, confusion went up several notches when the EITC statement positioned VMUAE as just a ‘brand' and ‘not a MVNO'. Several questions instantly come to the fore. Is this yet another attempt by du to regain market share? Is the market positioning aimed at staying safe of the regulatory and licensing complications? For telco professionals who have been in the region for several years, EITC's announcement also brought back memories of another Virgin Mobile venture: the brand's ill-fated launch in Qatar in 2010.
In May 2010, Richard Branson, chairman of the UK-based Virgin Group, jet-skied into Doha for the launch of Virgin Mobile Qatar over the network of Qatar Telecom (Qtel) as a new mobile service brand. Just a year later, in June 2011, Qatar's telecommunications regulator on Monday ordered Qatar Qtel to close all its Virgin Mobile-branded services in the country. That decision came after Vodafone Qatar threatened to take legal action against ictQatar for allowing the partnership. Vodafone Qatar claimed Virgin's foray into the country constituted a third service provider in Qatar and so violated the terms of Vodafone's licence.
The Qatar incident underscored just how complicated regulation around MVNOs can be. The challenge for operators and regulators is that the definition of MVNO is open to interpretation.
It is perhaps telling that Virgin Mobile has not mentioned the planned UAE launch of its brand on its own website; the company is no doubt keen to tread carefully and let EITC, or du, take the lead.