Virgin Mobile Will Shake Up SA's Cellphone Market

by Daniel Thole
2006-03-25 00:00:00 | Viewed 3804 times

COMPETITION is finally coming to the telecommunications industry -- but not where it was most expected.

Forget about the second network operator, because by the time that finally debuts to rival Telkom most of us may have given up on fixed-line communications. The real new player to watch is Virgin Mobile. Technically speaking, there should not be a Virgin Mobile, because government is not offering a fourth cellular network licence. And SA's restrictive legislation outlaws virtual mobile network operators that piggyback on the networks of existing players. But Virgin, true to its innovative reputation, has sidled around that by forming a joint venture with Cell C instead.

Don't try to scrutinise the difference, because you may not spot one. Just be grateful.

Virgin Mobile will launch in June or July with the usual range of voice and data services. It will not spark a price war, but CEO Sajeed Sacranie is promising better quality and value for money.

There will be no handset subsidies, because the people it is targeting do not need that financial crutch. Nor are they duped by it, Sacranie says.

"We are not there to fool the customers into thinking they are getting a handset for free." Handset subsidies offered by the existing operators usually see customers pay more in the long run and shackle them into lengthy contracts.

Sacranie is not divulging too many details right now, but he says Virgin's proposition will be made more attractive by deals with its sister companies.

So people who use its gyms or fly its airline could enjoy more benefits all round.

"Technologically we are not going to be offering anything untested in this market. The thing we are offering is a very different experience, even if that sounds rather vague and fluffy."

Although its prices will be "competitive" rather than challenging to the existing players, the rivals will be forced to respond or risk losing even more of their most affluent customers than Virgin actually aims to win.

That should mean better prices, simpler and shorter contracts, and a faster and more efficient response to queries.

Bring it on.

This article was first published in Business Day (Johannesburg)

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