Virgin Mobile pulls out of South Africa

South Africa’s first mobile virtual network operator (MVNO), Virgin Mobile, has announced it will stop operating under its current name at the end of November 2021 and move from a consumer-focused business to an MVNO-enabler.

The operator expects its 10-month business rescue process to be concluded by the end of September.

“In accordance with the business rescue plan, creditors will be settled in full upon exiting business rescue,” the company said.

“Although details in relation to the recapitalisation of the business cannot be shared at this stage, the directors have announced that it will cease trading as Virgin Mobile South Africa from the end of November 2021 and that the Virgin Mobile brand will be withdrawn from the South African market.”

Current Virgin Mobile South Africa CEO Zak van de Merwe will also step down as executive director and CEO.

Van de Merwe said the business aims to take a different direction, which will see it move away from its traditional consumer-focused business to play a more enabling role in the further development of the South African MVNO market.

The company said it would allow all customers to transfer to a new service provider with no penalties up to the end of November 2021.

“The company’s customer care team will be on hand for those customers who wish to migrate to different service providers,” the operator stated.

Zak van de Merwe, outgoing Virgin Mobile South Africa CEO

The company appointed senior business rescue practitioner John Henning and junior practitioner Peter Thompson as its business rescue practitioners in 2020, after the business suffered due to the Covid-19 pandemic.

Virgin Mobile said it was already in a vulnerable position when the pandemic hit.

“The onset of the Covid–19 pandemic exacerbated the issues the company was facing,” it stated.

Virgin Group previously decided to cease using the Virgin Mobile brand in South Africa as part of the sale of the business in 2019.

Under an agreement on the restructuring of the business, Virgin Mobile was allowed to continue using the brand for the duration of the company’s restructuring, but neither Richard Branson nor the Virgin Group has any share in the company.

“Virgin Mobile South Africa has been proud to connect people across South Africa for the past fifteen years,” said Van de Merwe.

“As we enter this next phase of the business’ growth strategy, the business plans to take a different direction which will see it move away from its traditional consumer-focused business to play a more enabling role in the further development of the South African MVNO market,” he said.

“As the first MVNO on the continent 15 years ago, we were proud and still are proud to service and shape an industry that today is a significant contributor to the Telecommunications sector. As the market now starts to enter the next phase of its evolution, the team are excited and equally hopeful that we will continue to play a pivotal role in the industry’s development.”


Now read: Mango Airlines to be placed into business rescue

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Virgin Mobile pulls out of South Africa