Virgin Mobile plans to roll out more mobile virtual network operators (MVNOs) in North and Sub-Saharan Africa as it looks to take advantage of the huge opportunities in providing such services.
Mikkel Vinter, chief executive officer (CEO) of Virgin Mobile Middle East and Africa, told the MVNOs Industry Summit in Sandton, Johannesburg today the company was looking to tap further into a market set to boom, following its launch in South Africa in 2006.
Vinter said Deloitte figures showed there are 1,200 MVNOs active globally, 800 of which are in Europe and less than 10 in Africa, which offers a huge opportunity to companies such as Virgin.
“The MVNO is still in its infancy in other markets. So it is still very early days. But let’s not cry over that, it is an opportunity,” he said.
“The potential for Africa is at least 500 MVNOs over the next 10 years. What a fantastic opportunity. I don’t think there is any other market out there that has the same opportunity.”
He said the African market was attractive from a demographic perspective, as well as the fact Africa is still seeing growth in mobile penetration, which has become stagnant or even declined in Europe.
“We’ve seen how the mobile businesses have literally driven revolution in Egypt for example, and there is no doubt that in Africa the mobile space is very high on the list of technologies changing the continent,” Vinter said.
Vinter said, however, that MVNOs needed to demonstrate they could add value for operators.
“You need to prove as an MVNO that you are really bringing something to the party that the operator is not able to do,” he said. “We see the two most important opportunities being in the youth and ethnic spaces.”
Virgin has launched FRiENDi Mobile in the Middle East and Asia in order to appeal to the ethnic segment, which comprises a great number of people living away from their country of birth, while Virgin Mobile is targeting the youth market.
Vinter did identify some challenges from operating in Africa, but said Virgin Mobile was not put off by them.
“The continent is very diverse. There are big countries, there are small countries, there are wealthy countries, there are poor countries. This means that your proposition must be very flexible,” he said.
“There is a heavy government involvement still in the telecoms sector. In many markets telecoms is a strategic industry and the government takes a lot of interest, from a revenue perspective but also from a security perspective.
“It is still early days in telecoms liberalisation.”