Virgin mulls Africa

By Nicola Mawson, Contributing journalist

Johannesburg, 11 Aug 2006

While SA`s latest mobile operator does not have any firm plans to expand into Africa, this is not something it would rule out.

Virgin Mobile chief marketing officer Tristao Abro says the company has not ruled out expanding north of SA`s borders. While it has no plans to do so on the drawing board, success in the local market would provide impetus for such a move.

Abro says the company is always open to new opportunities, and management is prepared to be flexible and act quickly when opportunities present themselves. "We have to be adaptable all the time; we have to be able to change."

Virgin is likely to use its model of joining up with a local operator and piggybacking off its network, similar to its relationship locally with Cell C. Abro says the model of providing enhanced services off someone else`s network is one that works well for the company.

He adds SA has enough capacity to handle mobile growth in the next three to five years. "The cost of going out and rolling out a new network doesn`t make sense."

Capacity

However, he believes this capacity can be improved on, and new generation technology will enhance capacity on the networks further. However, he says if technological parameters changed in the marketplace, and Virgin thought it could add value to its customers, it would investigate these changes.

The company has 12 000 customers. Abro says Virgin does not have the profit margins other companies benefit from, partly as a result of offering per-second billing. "We want to be a niche business, so we need to be focused," he says.

Abro says SA has an addressable market of about 28 million, of which about 22 million have cellphones. Higher figures often quoted are probably a result of discarded SIM cards, he says.

The company, which is six weeks old, is aiming for about 10% of the market. Abro says its business model is not built on mobile number portability (MNP), so - while it expects to benefit from this - failure by government to implement MNP by 18 September will not cause the company to crash.