Virgin Mobile targets 300 000
June 23, 2006
By Thabiso Mochiko
Johannesburg - Virgin Mobile South Africa expects to have about 300 000 subscribers within 18 months from its joint venture with Cell C, South Africa's smallest cellular operator.
There are more than 30 million cellphone SIM cards in use in South Africa. Virgin Mobile, which will operate as an enhanced service provider, will piggyback on Cell C's network.
It will take on the country's cellular operators, Vodacom and MTN, as well as its partner, Cell C.
Virgin Mobile will buy bulk airtime from Cell C and will compete with it in the market.
Virgin Group's chairman, English billionaire Richard Branson, said: "Consumers clearly like what we are doing … We have experimented with the Brits, the Americans and the Australians, and we sold 8 million to 9 million … phones in those markets."
Virgin Mobile planned to open 300 outlets in 90 percent of the major metropolitan areas. However, the group would not be selling its products through the informal market as "we don't believe they can be able to serve our market effectively", said Virgin Mobile SA's chief executive, Sajeed Sacranie.
The company would offer per-second billing for all its products and it would offer monthly contracts as opposed to the two-year contracts other providers insist on. Unlike its competitors it would not supply "free" handsets.
Sacranie said: "We won't pretend to give our customers freebie mobiles." Customers would be able to pay off phone purchases over time.
He said "millions of South Africans were locked into long-term contracts fraught with hidden charges".
Virgin Mobile SA's strategy is in line with mooted regulations by the Independent Communications Authority of SA, which will force cellular operators to offer shorter contracts.
South Africa's informal cellphone market had mushroomed over the years, but the introduction of the Regulation of Interception of Communications and Provision of Communication-Related Information Act (Rica) was likely to affect entrepreneurs who were making a living out of selling cellphones, starter packs and airtime.
Cellular operators were expected to register all prepaid customers to enable the government to intercept calls. Virgin Mobile would implement Rica requirements from the first day of operations, said Sacranie.
Arthur Goldstuck, the managing director of research firm World Wide Worx, said Virgin Mobile's offerings cut through the "complexity of simply using a cellphone".
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