The name Virgin has become synonymous not just to entertainment, with its media and music recording business, not just to travel with its chain of hotels, car hires, and airlines, but to a host of products and services that carry the Virgin tag that include something as mundane as a cola drinks, books, flowers all the way to being an electric power supplier.
It now has about 400 companies under the Virgin Group. People in the mobile phone communities know it as a 2G and 3G network operator in the GSM and CDMA standards and is better known as Virgin Mobile under the Virgin Media corporate family which in turn is under the Virgin Group of super-tycoon Sir Richard Branson.
A Brief Look Into the Past
It was in 1999 when Virgin Mobile was launched from a private joint venture between One2One which was to become T-Mobile in 2002 and the conglomerate Virgin Group of Sir Richard Branson, whose business empire included nearly 40 companies carrying the Virgin brand and included the famous upscale airline Virgin Atlantic. The joint venture called for leasing network bandwidth from local telecoms provider primarily from One2One and reselling it under the Virgin Mobile name.
After acquiring One2One and renaming it T-Mobile UK, Deutsche Telekom sold its 50% equity in the joint venture to the Virgin Group which now owned all of the company. But in 2005, the carrier entered into talks with NLT-Telewest Inc, for an equity sway which would give Richard Branson a stake in the larger NLT-Telewest company. And it was in 2006 that the deal went through with NLT-Telewest rebranded as Virgin Media which made it the first four-way or quadruple lay media conglomerate on the planet.
It brings together under one roof traditional television broadcast media, fixed line phone services, broadband internet and mobile phone services.
A Novel Business Model
UK's first virtual mobile network operator launched in 1999 is also the world's first. Unlike it competitors, Virgin Mobile does not own or operate its own network infrastructure. Rather, it has contracts with local network providers for reselling to consumers. It's essentially a subcontracting deal and is not a new business model. But in the area of mobile telephony, when carriers like Vodafone, Orange, T-mobile and O2 have invested on putting up their respective 2G and 3G networks for which they get subscription sales from consumers, the business model is new.
In the UK, Virgin Mobile uses the current 2G and 3G networks of T-Mobile. To a large extent, the business model didn't have to be saddled with capital recovery costs in putting up, operating and maintaining a capital-intensive telecoms network and can therefore be competitive in pricing 2G and 3G network services to subscribers with value added differentiating services.
This became the standard business model for Virgin Mobile companies that eventually sprouted in other countries. In the US, it has Sprint Nextel as its network providers. In France, it uses Orange S.A. In Canada, it uses Bell Mobility, South Africa uses Cell C and in India, it uses the Tata Indicom network.
In all the countries it operates, only prepaid pay-as-you-go services are the norm but it also offers post paid option to select customers that require approval in the US, UK, South Africa, Canada and Australia.