Leaving aside the Cell C network issue, their poor service, and the fact that they are not a true MVNO (they cannot set tariffs and interconnect independently of Cell C), the real problem with Virgin Mobile is as follows:
The Virgin brand is positioned in the UK (and most other developed markets) as an aspirational, but "everyman" brand. Most of the Virgin companies have built their reputations on offering great value for compelling, different services, yet remaining accessible to the man in the street. For those who've never experienced Virgin in the UK (Virgin Mobile UK, Virgin Records, Virgin Atlantic, Virgins Trains, Virgin Broadband etc), they are the brand chosen by people who want the best price, but still want good service, often with some clever twists. In a number of cases (e.g. Virgin Mobile UK), they are actually the cheapest.
In contrast, or perhaps as a result of the above, Virgin is perceived in South Africa as a highly aspirational, premium brand, particularly by people who have experienced it in other markets, and would like to show off the fact. For the man in the street in South Africa (who is, on average, much lower on most economic scales than his counterpart in the UK), Virgin has no such resonance, and is simply another "foreign" brand. He's not likely ever to use Virgin Atlantic, Virgin Trains, Virgin Broadband, or even Virgin Active.
Virgin Mobile South Africa did nothing to improve this perception by using UK adverts unchanged in this market, and (as in this article) they have confirmed their position by targeting the premium, but supposedly cost-conscious market. Unfortunately, for all but those few kugels in Sandton who just have to have the brand, they just don't have a compelling product for that market.
What I cannot understand is how Richard Branson didn't see this, and he continues to let (typically obnoxious) ex-pats run the business. It's a pity he couldn't have run it himself and done it properly.