Virgin Mobile SA - 2nd Birthday & Market Perspective


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Virgin Mobile SA - 2nd Birthday & Market Perspective

  1. 1. Virgin Mobile SA’s 2 nd Birthday Progress Review & A Perspective On The Market 24 th June 2008
  2. 2. Dec 06 New CEO 24 Jun 06 Launch Jun 08 500 000 Activations Jun 07 ASA Ruling Jan 2008 Soweto Business Plan Competition Nov 06 MNP June 07 Over 100 000 Activations Nov 07 Unlimited SMS Feb 2008 Unlimited SMS Mr Wessels / Illegal Lottery May 07 Truth Will Set You Free May 08 50c Concert May 07 4 Simple Packages A Busy Two Years…
  3. 3. Gross Adds Cumulative Gross Adds (‘000) The launch business model assumed <350k cumulative gross adds by end of 2008
  4. 4. Points Of Distribution Points of Dist. (Access Packs)
  5. 5. ARPU Source: Mobile World 2007 average; VMSA
  6. 6. Our Pitch & Our Target Market <ul><li>“ I feel it in my pocket and I like them” </li></ul><ul><li>Attitude target: </li></ul><ul><li>Independent-spirit, want to be different, like a good deal </li></ul><ul><li>Value target: </li></ul><ul><li>upper half of the market (LSM 7-10, >R100 pm) who pay for their own bill </li></ul>
  7. 7. Mobile Around The Consumer Not Us… <ul><li>Prepay Monthly </li></ul>Prepay Top-Up Plan Postpay Monthly … All with no lock-ins, Top-Up Plan with unlimited SMS option Usage / Commitment Credit / Handset
  8. 8. Progress Review <ul><li>Happy about progress </li></ul><ul><li>Building scale (relative to our plans) </li></ul><ul><li>Two strong and strengthening shareholders </li></ul><ul><li>Championed MNP </li></ul><ul><li>The only provider with unlimited sms </li></ul><ul><li>The only provider without termination fees </li></ul><ul><li>Must do better </li></ul><ul><li>Took us time to adapt to market language </li></ul><ul><li>Rolling out to Dealers and Franchises in 2008 </li></ul><ul><li>Margin pressure – MVNO structure; some SA market-driven </li></ul>
  9. 9. Virgin Mobile: The ‘Virtual’ Model Network Most of the rest
  10. 10. The Mobile Virtual Network Operator (MVNO) Source: Accenture / Pyramid Research How Deep Does The Brand Want To Go?
  11. 11. VMSA – The Only MVNO On The Continent Source: Politechnico de Milano / Virgin Management Limited Europe/Scandic/Russia 185 Americas 42 Rest of World 18 Africa 1
  12. 12. <ul><li>Virtual Operators are good for Africa </li></ul><ul><li>Competition & Choice </li></ul><ul><li>Efficient resource use </li></ul><ul><li>Consumer focus </li></ul>Network Various parts of the rest ????? The MVNO & Africa
  13. 13. MVNO Global Potential <ul><li>MVNO subscriber base grew by 24% in 2006 to reach 89.3m subscribers </li></ul><ul><li>By 2012, MVNO subscribers will account for 147m subs and >3% of mobile subscribers globally </li></ul><ul><li>Europe leads the way in MVNO activity, NA picking up </li></ul><ul><li>Vast opportunities for organic growth exist in Africa, the Middle East and Latin America </li></ul>Source: Accenture
  14. 14. The Real Questions To Ask <ul><li>The wrong questions: </li></ul><ul><li>“ Why have VMSA not got 10% market share yet?” </li></ul><ul><li>Rather… </li></ul><ul><li>“ Why isn’t there more of them yet?” </li></ul><ul><li>“ Is the playing field level?” </li></ul>
  15. 15. Wholesale Interconnect Left Unchecked <ul><li>The incumbents’ hypothetical conversation: </li></ul><ul><ul><li>If I have half my traffic terminating on your network and you have half terminating on mine, then what changes if the fee goes up?... </li></ul></ul><ul><ul><li>… how about +600% in three years? </li></ul></ul><ul><ul><li>(Actual movement - source ICASA) </li></ul></ul>
  16. 16. Virgin Mobile Will Be Part Of The Influence <ul><li>Asymmetric interconnect can happen in SA </li></ul><ul><li>Prices can come down & service will go up </li></ul><ul><li>More firms like us will join the market – industry and consumer understanding of the MVNO will rise </li></ul><ul><li>It is not just the largest firms shaping mobile history in Africa </li></ul>
  17. 17. To Conclude… <ul><li>Turning two and doing nicely: “Small is beautiful” </li></ul><ul><li>The first MVNO in Africa, but we welcome company </li></ul>