Cell C disposes of Virgin MVNO stake
Calico Investments buys 50% stake in Virgin Mobile South Africa
South African telco Cell C has agreed to dispose of its 50% stake in Virgin Mobile South Africa, an MVNO that uses its network.
The stake will be acquired by investment vehicle Calico Investments, which will buy a 45% stake of the company, and Virgin Mobile of the UK, which acquire the remaining 5%.
Calico, which is incorporated in the Bahamas and specialises in telecoms and retail, plans to develop a “strategic relationship” with Virgin Mobile South Africa and intends to invest additional growth capital into the company.
This will enable Virgin Mobile South Africa to offer a wider range of improved products and services to its growing customer base in South Africa.
Faisal Al Bannai, a director of Calico Investments, said: “Calico looks forward to working with Virgin Mobile South Africa, to develop the business through the expansion of its offerings.
“Virgin Mobile South Africa has shown an ability to differentiate itself from the competition and, with our intended investment, there will now be even more potential to increase the range of quality products and services [it] can offer going forward,” added Al Bannai, who is also CEO of UAE retailer, Axiom Mobile.
Steve Bailey, CEO, Virgin Mobile South Africa, said that his company had shown “consistent high subscriber growth” and has significantly increased its base of higher ARPU post paid subscribers in South Africa over the last two years.
“It is time for us to capitalise on this growth and bring in an additional shareholder to invest in [our] further expansion, which will enable us to deliver more exciting products and services to our valued customers."
Lars P Reichelt, CEO, Cell C, added: “Cell C has been and will continue to be a strong partner of Virgin Mobile South Africa. The change in shareholding is part of Cell C’s strategy of providing a platform for growth for MVNOs, backed up by our award‐winning HSPA+ 900/2100 network.”
The transaction is still subject to certain conditions including South African Competition Commission and Exchange Control approvals. The deal is expected to close by April 2011.