3 July 2006
British entrepreneur Sir Richard Branson hopes to bring “true competition” to the South African cellular industry with the arrival of Virgin Mobile.
Virgin Mobile launched in South Africa in June with the aim of capturing 10% of the South African market with ten years.
The arrival of a fourth cellular company could shake up an industry dominated by MTN and Vodacom. Branson believes that consumers will benefit from the competition that his company brings.
“There’s lots of little tricks that have been used to enable the phone companies to get rich on the back of individuals. For instance, if you only use 31 seconds they’ll round it up to 60 seconds and charge you for it, and so on so,” Branson said on Moneyweb radio.
Branson’s Virgin Mobile is a virtual network, a Virgin-branded service running over Cell C’s national network. This is the same model that Virgin Mobile has used in the United Kingdom where they have over 5 million subscribers.
Cell C is the youngest of South Africa’s three cellular companies and has been in operation since 2001.
‘Free to leave’
Virgin’s cellular offering will not require mandatory two-year contract and will unbundle handsets from airtime, removing the “clutter and fog in the market” Sajeed Sacranie, Virgin Mobile SA CEO told ITWeb.
“We are selling month-to-month contracts and, if you don’t like us, you are free to leave,” Sacranie said.
“We’re trying to have a sort of simple, clear-cut pricing policy like we’ve done around the rest of the world,” said Branson.
“It’s worked extremely well in America and the UK and Australia, and we think it will work well in South Africa.”
Branson has had a South African presence since 2001, when he bought the bankrupt Health and Racquet Club chain at Nelson Mandela’s request.