Africa & Middle East Telecom Week: Virgin Mobile South Africa - A Warning from Singapore.

LONDON -- This week will see the launch of Africa's second* 'true' Mobile Virtual Network Operator. But 'Africa & Middle East Telecom Week' (www.africantelecomsnews.com) notes that Virgin Mobile South Africa must take heed of the lessons it learnt from Singapore.

Virgin Group and Cell C have set-up a 50/50 joint venture, and are looking to the introduction of number portability to drive subscriber uptake. The Cell C operation has suffered from its relatively late entry into the market, and is currently ranked third with some 4.9 million subscribers at the end of 1Q 2006.

Virgin already has operations in the US, Canada, Australia and France, but 'Africa & Middle East Telecom Week' cautions that not all its launches have seen the sweet smell of success.

'Africa & Middle East Telecom Week' notes that Virgin was forced to pull out of the Asian market just four years ago. Only nine months after it launched, Virgin Mobile pulled out of Singapore in July 2002, leaving Singtel with a loss of some USD 26 million, and this, according to SingTel at the time, was in addition to the operating losses from the previous fiscal.

At the time the two publicly concluded that the market was 'too saturated' to sustain an otherwise successful virtual network operator model. Virgin Mobile began its operations in Singapore in October 2001 and had reportedly signed-up some 30,000 customers by the time of its demise, compared to the 1.8 million it had in the UK, and 220,000 in Australia.

In March 2002 Lucas Chow, SingTel Mobile's CEO, claimed that Virgin had failed to deliver on subscriber expectations. Or put another way, Virgin Mobile had made a series of assumptions about the market, which subsequently proved to be flawed.

'Africa & Middle East Telecom Week' (www.africantelecomsnews.com) is a weekly news service for operators, manufacturers, infrastructure providers and investment banks, which in addition to a weekly round-up of news, provides regional mobile operator statistics, 12 Country Reports each year, and a fully-searchable online archive which contains over 9,000 individual stories.

* The MVNO Directory (www.mvnodirectory.com) defines a MVNO as a mobile voice / data service, operated via a third party's licensed spectrum network, where the third party is not in contact with the end user. ZanTel's operation with Vodacom is therefore considered to be an MVNO in the accepted sense.