Virgin brand has its place in SA: Friendi CEO

Mikkel Vinter, founder & CEO Friendi Group says that the group is on track to pump up to $50 million into operations in Africa, including Virgin Mobile South Africa.

In June, Virgin Group merged with the Friendi Group, the Middle East-focused mobile virtual network operator, to create Virgin Mobile Middle East and Africa, based in Dubai.

Vinter shrugged off the notion that the Virgin brand might struggle in SA amid increased competition following the launch of Telkom’s mobile arm, 8ta, and the resurgence of Cell C under Alan Knott-Craig.

“We see South Africa as a big market, penetration is still going up. We see that the Virgin brand has its place in South Africa. It has a different cost base, and can thrive on a more focused strategy which does not require many millions (of subscribers) to turn it into a profitable business.”

Virgin Mobile SA is reliant on Cell C’s network, and says its subscriber base is approaching 400,000.

In July, it announced that it would reduce its store footprint to just eight locations as part of a plan to improve its customer experience. The process was expected to conclude during the first half of 2013.

As part of this revised strategy, Vinter said that Virgin Mobile aims to tie up new third party distributors in 2013, adding to the number of existing partners. “We think that is the way to play.”

He also noted that the group has undergone a transition period at management level, having appointed a new CEO in 2012. “We are quite optimistic,” he said of the group’s prospects in SA. “We are looking at a soft growth and are putting resources behind that by making upgrades to our (billing) systems.”

Vinter confessed that many of the company’s shops had been situated in less optimal locations. “We believe that we have kept the best shops.”

He said that, by closing those less successful shops, the group would aim to “divert some of that money to convert deals with third party distribution”.

“We believe we have a strong platform. It (Virgin Mobile) does have a high level of awareness,” Vinter said.

Vinter said that the group was on track to raise $100 million from investors and private equity groups to roll out and enhance the Virgin brand. The cash would be split evenly between Latin America, and Africa.

It was reported that Virgin Mobile aims to expand to Brazil, Colombia, Chile, Poland, and Oman. It currently has 18 million subscribers in nine countries.

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Virgin brand has its place in SA: Friendi CEO