The lacklustre performance of Virgin Mobile South Africa has led to a call for Cell C to pull out of its 50 percent joint venture. <\/p>\n
Cell C and Richard Branson’s Virgin Group launched Virgin Mobile SA in 2006. <\/p>\n
Last week investment advisory firm Delta Partners said that an acquisition of Cell C would become the catalyst to disband the Virgin Mobile SA operation. <\/p>\n
Telkom and Kuwait-based Zain have been named as potential buyers of Cell C. <\/p>\n
It has been a challenging three years for Virgin Mobile SA. It has failed to sign up the millions of subscribers it expected and has changed chief executives twice. <\/p>\n
Its third chief executive is Steve Bailey, a former executive at Cell C. <\/p>\n
Cell C took the reins at Virgin Mobile SA in 2008 when Cell C chief executive, Jeffrey Hedberg, was appointed chairman of the joint venture at the end of Virgin Group’s one-year tenure. <\/p>\n
Since its inception Virgin Group has brought in its own people to head the local operations but a source said they had unfortunately overestimated the local market and failed to deliver.<\/p>\n
According to insiders Virgin Mobile SA is selling its branded stores to focus on its core business as a virtual network operator. Once that’s done it will revert to its initial strategy of focusing on the high-end market rather than the low-end market Cell C is vying for.<\/p>\n
Cell C still believes the venture is ideally positioned to attract high-end customers, with its "strong brand to smell, look, and taste different from normal post-paid offers. Their enthusiasm can be contagious!" <\/p>\n
Cell C said on Tuesday that, as a shareholder, it had always wanted to see a better performance, and the introduction of Bailey "has injected significant and positive changes to Virgin Mobile’s operations". <\/p>\n
It said it was committed to Virgin Mobile SA as long as the operational and financial performance improved steadily. <\/p>\n
That begs the question: if there is no improvement, will Cell C call it quits?<\/p>\n