SA cell users cornered: Virgin Mobile

“Existing incumbents have done a good job of bringing telephony services to the country, but they’ve made a lot of money in the process. In a way, SA has the world of all worlds. Those who do not have money are not getting access as quickly as they could and those who can afford telecommunications are getting very little service. In between all this, there are organisations making money.”

With mobile number portability becoming a reality around the same time that Virgin Mobile launches, the company will be able to take advantage of customers looking for better services elsewhere while still retaining their existing numbers. Sacranie says Virgin’s services will be easy to understand and of superior service.

However, with Virgin’s proposition to the South African consumer being value for money rather than lower telephony prices, some may be disappointed. Also, Virgin does not have immediate plans to get involved in the broadband space. Virgin Mobile has entered into a 50-50 joint venture with Cell C for its offerings, with Cell C providing the technology backbone, with Virgin obtaining wholesale-priced minutes from Cell C.

As such, Virgin is dependent on Cell C’s data technology; the company uses 2,5-generation Edge (enhanced data rates for global evolution) technology, which is slower than 3G technologies.

Sacranie believes the current-two year contracts are marking prisoners out of customers, although he would not reveal plans regarding packages.

Contrary reports that Virgin Mobile would be launching as a mobile virtual network operator (where companies lease infrastructure from other mobile operators and then put their own software and billing systems on that) in South Africa, Virgin will be a pure service provider a la Altech’s Autopage Cellular and Reunert’s Nashua Mobile.

“The difference between Virgin and the other service providers is that we will be a dedicated service provider in that we will only offer Virgin-branded products.” Autopage and Nashua Mobile sell the offerings of other mobile operators.

Sacranie says Virgin hopes to win 10% of the South African market “within three to five years”.

Virgin will use the Virgin Active gym chain and open shops in there. Also, it will have ‘shops in shops’ and it is talking to a number of retailers, although Sacranie would not reveal which: “We’ll be in 90% of South Africa’s shopping malls on launch,” he says.