Huge Group buying company formerly known as Virgin Mobile South Africa
South African telecoms and technology company Huge Group has announced it will acquire Tethys Mobile, the company formerly known as Virgin Mobile South Africa.
“The board of directors of Huge Group is pleased to announce that it has concluded a series of transactions with the shareholders and creditors of Tethys Mobile Proprietary Limited (Tethys), which will result in Tethys becoming a wholly-owned subsidiary company of a foreign company controlled by Huge Group,” the company said.
Huge Group said it acquired Tethys for its software and technology platform and related intellectual property.
“The intention is to leverage the world-class technology built into this software and technology platform and the operational capabilities that exist in support of it,” Huge Group said.
“Over the past 16 years, Tethys has created a very sophisticated technical and operational capability linked to this software and technology that will allow the company to provide a Platform-as-a-Service or PaaS to organisations who aspire to provide mobile virtual network operator or MVNO services.”
“The software and technology platform includes a multi-tenant capable CRM, Billing and Online Charging System that provides enhanced billing, customer and subscriber management, product, tariff, and real-time rating capabilities.”
Huge Group CEO James Herbst said the company had “no appetite” to provide consumer mobile services.
“Our interest in the company is its software and technology platform. Huge Digital Enablement will offer its software and technology platform to MVNOs with the support of the mobile network operators,” Herbst explained.
Huge Group plans to change the name of Tethys to Huge Digital Enablement as soon as the transactions are implemented, and the company successfully exits the business rescue process.
The company said the transactions were subject to various conditions, including the finalisation of Huge Group’s due diligence.
Virgin Mobile South Africa became the country’s first mobile virtual network operator (MVNO) when it launched in 2006.
The company entered business rescue towards the end of 2020 and later announced it would stop operating under the brand in November 2021.
As part of a new strategy, it would move away from consumer mobile services and focus on becoming an MVNO-enabler, which gave rise to Tethys.
Cell C, the MVNO’s upstream network services provider, subsequently cut Virgin Mobile’s subscribers off from data, voice, and SMS services in the middle of September 2021.
Tethys senior business rescue practitioner John Henning said the 21-month business rescue process had been arduous but that there was finally a light at the end of the tunnel.
“Huge Group’s involvement will see the company recapitalised, it will see job opportunities created and new contributions made to the South African economy at a time when it is dearly needed,” Henning said.
Huge Group said that post-commencement creditors who supported Tethys during the business rescue process would be settled in full.
That includes Virgin Mobile South Africa subscribers who were due refunds after its access to network services was terminated in September 2021.
Huge Group said it would acquire Cell C’s claims against Tethys as well as the claims of various pre-commencement creditors.
Huge Group chairman Duarte da Silva explained the acquisition was a well-thought-through tactical investment that would deliver exponential returns to Huge Group’s shareholders in the very near term.
“Cast your mind back on WBS, which was a loss-making business a decade or two ago,” he said.
“Today, WBS is Rain and Rain is a prized investment of African Rainbow Capital. Rain’s founders understood the value of its spectrum, much like we understand the value of our software and technology platform.”
Herbst said the Tethys acquisition was part of Huge Group’s plans to increase its exposure to software investments.
“If we succeed in South Africa in providing our software and technology platform as a service, we will be well placed to cut the same cookie elsewhere in Africa,” Herbst said.
“We are making Huge Group ‘sexy’ and giving it a local and global appeal.”
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