Virgin Mobile

O2 goes for growth with MVNOs

Paul Rasmussen — Fri, 27 Nov 2009 12:51:51 -0500

Having soundly beaten its competitors in subscriber growth--significantly helped by its iPhone exclusivity--O2 is now looking for new routes to increase its lead by providing increased support for its MVNO partners.

Tesco Mobile (part of the Giant Tesco Supermarket empire), which is already one of the UK's most successful MVNOs, is an O2 partner and will shortly have access to the iPhone handset. This move is seen as O2 wanting to use Tesco's proven access to the budget and prepaid market, as well as triggering additional competition for Orange and Vodafone. This strategy also provide O2 with much lower customer acquisition costs while boosting mobile data revenues as already seen from existing O2 iPhone users.

While Tesco Mobile, which is 50 per cent owned by O2, is thought likely to offer cut price iPhones, other industry watchers believe Tesco Mobile will follow the incentives other iPhone operators are providing, such as free movie tickets to free home broadband lines, or double/triple Tesco loyalty points redeemable against grocery purchases.

"We'd love to bring a bit of Tesco value to the iPhone and offer something very different to what is out there," said a Tesco Mobile spokesman.

O2 has also launched its GiffGaff MVNO where members can get free services in return for participating in the community by answering support queries or submitting marketing ideas. Such contributions, all designed to reduce the costs to O2 of running the operation, earn points, which can then be exchanged for cash, mobile credit or charity donations twice a year. Of note is GiffGaff's copying of techniques successfully used in other sectors such as travel, where sites like Trip Adviser rely heavily on user input.

A suggestion put forward by one analyst is that the world's largest MVNO, Virgin Mobile, could become unsettled by the merger between Orange and T-Mobile and look for another strategic partner - which either O2 or Vodafone could comfortably fulfil.

For more on this story:
Rethink-Wireless

Only one bidder for 4th French 3G licence

Paul Rasmussen — Fri, 23 Oct 2009 12:09:21 -0400

The proposed sale of the fourth French 3G licence has descended into near farce as those supposedly keen to bid have walked away leaving the ISP Illiad as the only interested party. The deadline for applications is the 29^th October, although observers believe the likelihood of a fresh candidate appearing is remote at this stage.

Numericable and Virgin Mobile France, which previously said they were discussing options to jointly bid for the licence, have now jointly decided that unfavourable regulations and uncertainty surrounding the overall Capex requirements had forced them to reject any idea of bidding. This move follows decisions by Egypt's Orascom Telecom, the French investment company Bollore and the local alternative telecoms operator Kertel to also abandoned plans.

Speaking on behalf of Virgin Mobile, Numericable CEO, Pierre Danon, said that the two firms had spent a considerable amount of time exploring the opportunity provided and in talking to the three incumbent cellcos, but had decided that "given the conditions on the licence, we think it will be very difficult for the holder of the fourth licence."

Under the terms of the licence award, the successful bidder is required to build a network to cover 25 per cent of the French population before it can reach a roaming agreement with other operators. Danon claimed that the uncertainty over the timeframe and costs related to hitting this target made it too risky to proceed. "The newcomer will need some 1,000 antennas to reach that threshold. It would have to install the antennas at new locations or on the sites of existing operators, effectively increasing the risk and costs associated with the project. The business case for the project could entirely fall apart, and the level of uncertainty is very high."

The lack of interest in this 3G licence will potentially embarrass the French government, together with the three existing 3G operators who have each complained bitterly about the low-cost of entry for this fourth operator.

However, the frequencies that make up the fourth 3G licence represent only about a third of the frequencies that the three established operators were allocated with their licences back in 2001 and 2002. Two more sets of frequencies will be auctioned in a second phase and will be open to all parties, including the three existing network operators.

For more on this story:
Total Telecom

Virgin Mobile acquires French MVNO rival

Paul Rasmussen — Fri, 16 Oct 2009 12:48:29 -0400

In an effort to become profitable by next year, Virgin Mobile France has agreed to buy the local MVNO operations of Sweden's Tele2 for €56 million. The deal is seen as a significant step for Virgin Mobile France given its objective of moving into profit in 2010 and having more than two million customers.

Tele2 France had close to 430,000 customers at the end of Q2/09 and was reported by its Swedish parent company as having a turnover last year of €120 million, but, more importantly, it dramatically increased its profits from €576,000 in 2008 to €5.2 million for the first half of this year.

While Tele2 has given no explanation for the sale, the company has been steadily reducing its European-wide investments and focusing on its operations in the Nordic regions. Tele2 France would appear to have been positioned for sale following an extensive cost-cutting programme to improve its financial performance.

Virgin Mobile France, which is 48.5 per cent owned by Carphone Warehouse, has not made a profit since the launch of the MVNO claiming that it had been investing in advertising and customer retention programmes which had enabled it to lift its customer base to over one million.

For more on this story:
Financial Times

Fourth French 3G licence consortium could include Orascom

Paul Rasmussen — Wed, 07 Oct 2009 13:36:20 -0400

While attention within France centres around the resignation of France Telecom's deputy CEO following a spate of suicides within the company, unconfirmed reports claim that Orascam Telecom has quietly sounded out the possibility of joining a consortium to bid for the fourth French 3G licence.

Orascom Telecom, backed by the Egyptian entrepreneur Naguib Sawiris through his Weather Investments holding company, has previously made plain his ambitions to enter the French cellular market and is reported to have approached the Numericable-Virgin Mobile consortium about a potential investment.

Naguib Sawiris, who has a reputation for the unconventional, is said to have offered to buy into the Numericable-Virgin Mobile grouping following ‘fruitless talks' with Iliad and Bollore Telecom over a possible tie-up.

Orascom Telecom was linked with a possible takeover of another French mobile operator, Bouygues Telecom, in 2007.

For more on this story:
Telegeography

Rumour Mill: Is Red Bull on verge of pan-European MVNO Launch?

Paul Rasmussen — Fri, 02 Oct 2009 08:56:56 -0400

The energy drink vendor and F1 team sponsor, Red Bull, would appear to be fully prepared to unveil its MVNO service in Austria within the next few weeks. This move has triggered industry speculation that the company will then launch MVNO services in other European countries, mimicking Virgin Mobile with its exclusive networked SIM deals.

According to Red Bull Mobile's web site, Austrian consumers are to offer two exclusive network tariffs, named simply All and All+, the latter offering 2,000 texts and minutes and up to 2GB of Internet data transfer for €29. However, local observers claim that the most attractive feature of the Red Bull Mobile network appears to be its online Portal. The Portal is branded as the ultimate tool for accessing news, interviews, weather, sports and downloads from the world of Red Bull and beyond.

The initial handset portfolio includes Nokia's N97, 5730 and 5800, Sony Ericsson's C702 and G705, and Red Bull's very own dedicated BH-1 (manufactured by ZTE).

Whether the Red Bull brand--with its considerable marketing muscle, has the weight to break into the already over-crowded European MVNO market will be watched with interest by the cellular industry. While niche MVNOs continue to launch on an almost weekly basis, a pan-European strategy needs a multitude of skills and deep pockets--as seen with the attempt by Blyk to build a European empire.

For more on this story:
PR Fire

French president gets involved with fourth 3G licence

Paul Rasmussen — Wed, 16 Sep 2009 13:39:42 -0400

The level of political lobbying surrounding the granting of the fourth and final 3G licence has been revealed following reports that the French president, Nicolas Sarkozy, has expressed his reservations.

The three existing 3G operators are believed to be at the centre of these manoeuvrings, claiming that the applicant for the fourth licence will only be asked to pay €240 million, a fraction of the €619 million they each paid in 2001.

However, the involvement of the president of France in this argument significantly increases the pressure on the telecoms regulator to review the condition of the 3G tender. According to inside sources, Sarkozy was said to be sceptical on the choice of the fourth 3G operator, suggesting that the "lowest price was not necessarily the best one."

The French ISP Illiad is expected to be the most likely successful bidder, but, following Sarkozy's remarks, the value of the company's shares fell by over two per cent in a rising market. Other bidders interested in the fourth licence are expected to include a joint proposal from Numericable and Virgin Mobile, but observers remain doubtful of this combined bid making progress.

Orange and SFR have already threatened to challenge the bid price for this fourth 3G licence before the European Union competition authorities, while Bouygues Telecom said it too was considering action.

For more on this story:
Telegeography

Virgin to launch mobile VOD, and unveil 'social networking' handset

Paul Rasmussen — Fri, 07 Aug 2009 12:09:02 -0400

Having gained over 73,000 new mobile phone customers during Q2/09, Virgin Mobile UK is now reported to be looking to encourage its near 800,000 mobile users to subscribe to mobile video-on-demand (VOD) and use social networking sites using a new (yet to be launched) BlackBerry-style email device.

The strategy is part of Virgin Media's efforts to link together its mobile, broadband and television customers under a ‘third screen' campaign, which the company hopes will provoke more of its broadband customers to sign up for mobile services. This move will see the company unveil its new Blackberry-like handset for use on networking sites such as Twitter, as well as offering high-end smartphones, like the Nokia E-series, to attract high-spending customers.

According to Graeme Oxby, Virgin Mobile's managing director, the company , has set its sights on integrating the content available through Virgin Media's set-top box and on its broadband portal more closely with mobile devices. "We are finally getting ready for the bigger push around what we think is the next big step - what we call the 'third screen'," he said. "We have customers using fast broadband and customers watching TV. How do we bring that to life on the mobile phone?"

"We have done some mobile video so that we know it works and people like it, but actually getting to VOD, which is more a world of pause, rewind and resume rather than just being able to download, is where it gets very interesting."

Meanwhile, Virgin Media announced it was working to launch the world's first unlimited music download subscription service with Universal Music, and said discussions were now underway with other major and independent labels and publishers.

For more on this story:
Guardian and Mobile Today

Orange to protest pricing of new French 3G licence

Paul Rasmussen — Wed, 05 Aug 2009 13:44:11 -0400

France Telecom Orange plans to lodge a complaint with the EU over its annoyance that the French government plans to offer a fourth 3G licence for around a third of the amount which it had to pay in 2001. The company said that it would strongly contest the licence fee of €240 million, claiming that the French government was effectively providing state aid to the fourth operator compared to the other three holders of 3G licences.

Regardless of this truculent approach, the French telecoms regulator, Arcep, said that the deadline for applications would remain set at 29^th October 2009, with the licence being awarded around eight months afterwards.

Arcep said that it would judge the applications based upon nine criteria, but with prominence placed upon the bidder providing 3G coverage for 25 per cent of the population after two years and 80 per cent after eight. The winner will also be measured on its business plan and the ability to support a full network rollout, estimated to require a capex of €1 billion.

Iliad, the parent company of French ISP Free, has confirmed that it would be a candidate for the licence, albeit that a previous bid for the licence by the company was rejected by Arcep in October 2007. Virgin Mobile France has previously suggested that it might be interested in the licence as a joint venture with Numericable, and Egypt's Orascom Telecom recently said it would consider joining a consortium to bid for the licence. Most observers believe that Iliad is the only company able to meet Arcep's requirements for a fourth 3G licence in France.

For more on this story:
Telegeography and Cellular News

Virgin Mobile: Where will Branson spend his US$250m?

Paul Rasmussen — Wed, 29 Jul 2009 12:36:42 -0400

Having succeeded in snatching a profit of US$250 million from the sale of Virgin Mobile USA to Sprint Nextel, speculation has arisen as to where high-profile billionaire Sir Richard Branson might look to invest this considerable sum.

Branson could have made considerably more if he had sold when Virgin Mobile USA was floated two years ago, but industry watchers nonetheless are expecting the current proceeds to be invested in other mobile phone ventures, particularly in France, India and the Middle East.

As the French government prepares to open the auction for the country's fourth 3G licence, Virgin Mobile France and Numericable, which is owned by private-equity firms Carlyle Group and Cinven as well as investment vehicle Altice, are said to be studying a possible joint bid. According to insiders, the two firms could form a core holding company open to French and foreign partners that would then adopt an aggressive wholesale strategy targeting MVNOs.

Virgin Mobile has also stated it wants to increase its operations in India and was considering launching a Middle East mobile service.

For more on this story:
Time Online

T-Mobile UK: D Telekom seeks asset swap as against sale

Paul Rasmussen — Fri, 03 Jul 2009 12:10:17 -0400

As Europe's major mobile operators refuse to comment on any formal interest in acquiring T-Mobile UK, the owner of this troubled company, Deutsche Telekom (DT), has wrong-footed potential bidders by leaking information that a swap for a comparable mobile operator in central or eastern Europe is now the preferred route.

Insiders claim DT's CEO, René Obermann, is keen to avoid a sale of its UK subsidiary, given the doubts that this would spark over the company's ambitions to remain a global player. Early speculation has placed Vodafone Turkey as a possible candidate, albeit that Vodafone has invested heavily and failed to achieve a satisfactory return in this country. However, such a move would nicely complement Greece's OTE, which DT acquired recently.

While O2 Telefonica and Vodafone are reported as being keen to negotiate with DT--with FT Orange slipping off the leader board, analysts are beginning to question the value of what T-Mobile UK has to offer. While the company has around 16 million customers, it is largely made up of an unstable base of prepaid consumers who can switch carriers easily to chase the cheapest or best value plans. T-Mobile also generates around 45 per cent of its cash flow from its MNVO deal with Virgin Mobile, a deal that could easily evaporate if a new owner ruffled Virgin's sensitive feathers.

However, a merger with its network sharing partner in the UK, 3UK, has apparently been squashed by DT. Perhaps the logical sense of this deal stumbled when DT indicated that it was looking for a minimum of €3 billion for its UK subsidiary.

One suggestion for the intense interest by O2, Vodafone and Orange in bidding for T-Mobile UK is to spoil the ambitions of the others. This could lead to the winner overpaying while the losers then complain bitterly to the regulator in an effort to confuse and delay the acquisition. The ‘losers' could then attack the unsettled T-Mobile subscriber base with attractive offers and packages.

For more on this story:
The Guardian and Financial Times