Thursday, 14 March 2013

Is Virgin Mobile MEA in the right markets?

 Two items in the news caught my eye this week: Virgin has a new investment partner for its Africa & Middle East MVNO operation; and MTN reckons that with 'low levels of mobile penetration across our markets should support continued strong subscriber growth'.

So is VMMEA sitting in markets that are also poised for growth?

After a brilliant entry into the UK market by targeting the youth market, Virgin Mobile failed in Singapore, and its South African operation has achieved similar subscriber levels - and by rights should have been closed down. In Qatar Qtel adopted the Virgin brand to segment its offering (so entering as a branded operation rather than a conventional MVNO) but ended when rival Vodafone convinced the regulator there had been a licence breach.

With a fresh beginning, partners and capital, is VMMEA finally poised for success?

MTN and VMMEA have one market in common - South Africa. And that has high Mobile Penetration at 136%, and Virgin Mobile's MVNO operation has taken less than 0.6% of the mobile subscriber market, which ultimately saw Cell C sell its stake.

In fact, all four of VMMEA's markets are over the 135 percent penetration mark. The comparison with MTN is striking, with 72% of its markets below the 79% Mobile Penetration mark; 24% are between 80 and 119%, and only 5% are in the 120+% category.

So if market dynamics are not on the side of VMMEA, what will Richard Branson and his chums do now that they haven't done already?

MTN and Virgin Media Middle East & Africa Comparison of markets by Mobile Penetration 4Q 2012
For more on the MVNO market check out There is also a detailed review of the Middle East MVNO market published in January 2013: Middle East MVNO Market and Competitive Analysis 2013. Or for an overview of the MEA MVNO scene, check out MVNOs in the Middle East & Africa 2012 research briefing.