Virgin Mobile eyes African expansion

Following Virgin Mobile South Africa’s announcement earlier this year that it would be close 30 of its 38 stores in the country as part of a restructuring phase, parent company Virgin Mobile is in the process of securing up to $100 million from investors and private equity groups to expand into new markets – which includes South Africa. The other countries earmarked for development include Brazil, Chile, Colombia, Oman and Poland.

Jonathan Marchbank was appointed as the company’s Chief Executive Officer in August (image: Virgin)

According to the Financial Times, the company is planning to achieve $3 billion in worldwide revenues by 2020 and expanding into new markets is the first step towards their goal.

Virgin Mobile currently operates in nine countries and has 18 million subscribers. As part of that, Virgin Mobile hopes to bring in $1 billion from the Middle East and African market by the same year.

“The venture boasts 1.2 million customers and annualised revenue of $150 million, including South Africa, which has close to 400,000 customers,” The Financial Times wrote.

Virgin Mobile signed an agreement with Friendi Group in June, after which it created Virgin Mobile Middle East and Africa.

Richard Branson, CEO of Virgin Group, told The Financial Times that he hoped to expand Virgin Mobile’s central and eastern European operation from Poland, which he will launch in ten days, to Russia, and perhaps Turkey.

“We’re waiting for a licence in Russian for (Virgin Atlantic) flights to Moscow. If we’re successful in that, it will help us push into Russia proper with Virgin Mobile,” he said.

However, analyst Steven Ambrose is not convinced that Virgin Mobile will be able to attract the subscriber numbers they are hoping for. “The Virgin brand has not captured the imagination of the greater part of SA; its message is far too Eurocentric and has very little resonance with the average South African. The Virgin offering is now vague‚ a little complicated and very hard for the average consumer to see any clear benefit from‚” he said.

Last month Virgin Mobile South Africa appointed Jonathan Marchbank as the new CEO.

Charlie Fripp – Consumer Tech editor