Virgin aims to pick HK mobile partner after 3G auction
Reuters, 06.12.01, 8:20 AM ET
HONG KONG, June 12 (Reuters) - Virgin Mobile (Asia), the "virtual" cellular venture between Richard Branson's Virgin Group and Singapore Telecommunications <TELE.SI>, said it was likely to join with a local operator to provide a service in Hong Kong after the territory auctions third-generation (3G) spectrum in September.
"I think we would wish to see the outcome of the 3G competition (before striking a deal)," Virgin Mobile (Asia) chief executive Ross Cormack told reporters on the sidelines of an industry conference.
Hong Kong and Taiwan, which also plans a 3G spectrum auction this year, will be Virgin Mobile's next Asia markets after the venture launches a service in Singapore later this year, Cormack said. He said local partners in Hong Kong and Taiwan would be identified by early 2002.
Separately, Virgin Group is also believed to be close to finalising a deal to bring its virtual network model to the United States through a partnership with U.S. carrier Sprint Corp (nyse: FON - news - people), although Cormack declined to confirm that.
He did say that Virgin Mobile would soon make announcements in other markets. "These would be ventures in the U.S., in Europe, and Japan, because we've got teams actively pursuing MVNOs with incumbent network operators in all those markets as we speak."
"MVNO" is short for mobile virtual network operator. Virgin's U.K. virtual network has enlisted more than one million customers since its launch 18 months ago, Cormack said.
In Asia, Virgin Mobile has identified 10 countries (outside Japan), including China and India, where it hopes to launch a service over three-to-five years by reselling network capacity but providing every other aspect of mobile service.
The Asia venture has committed to spend US$550 million.
In Hong Kong, Cormack said Virgin Mobile would find a local network owner that would take an equity stake in the Hong Kong operation of 30-40 percent.
Such a collaborative model -- "skin in the game" for the network owner -- is key to the venture's success, Cormack said.
The Virgin Mobile (Asia) holding company is 50-50 owned by Virgin and SingTel, although it will sell equity stakes in the countries in which it operates.
Building on its youth-oriented brand and with plans to sell other Virgin products -- such as tickets on Virgin Atlantic Airways and other "lifestyle" products over its phones -- Virgin hopes to enlist six-to-10 million customers in Asia (excluding Japan) over the next three to five years.
Cormack said Virgin Mobile (Asia)'s maiden Singapore market would be EBITDA (earnings before interest, taxes, depreciation and amortisation) positive in two-to-three years.
REUTERS
Rtrs08:20 06-12-01
Copyright 2000, Reuters News Service.
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