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Published byKerry Oliver Modified over 9 years ago
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Upwardly Mobile? The Challenges for Ireland’s Mobile Sector Solutions for Virtual Mobile Operators 19 th May 2003
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Virgin Mobile – Why did it happen? Virgin saw gap in market for consumer champion and youthful brand –Little perceived difference between networks’ product, brand and user imagery, except Orange General sense of lack of innovation, high costs, loaded with catches and stings Opportunity for ‘white knight’ trusted brand
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Virgin Mobile UK - Overview Launched in UK in November 1999 Joint-venture between T-Mobile and Virgin £100m shareholder investment, £115 debt financing in October 2000 UK’s first MVNO, now world’s largest First consumer brand move into UK mobile industry
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Virgin brand ethos Innovation Challenge Quality Value for Money Fun! … in the way we provide services to customers … in the way we work together … in the way we work with our business partners
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Virgin Mobile created a proposition with personality Consumer focus – targeting 16-34 yr olds One tariff, no peak rates, more you use the cheaper it gets Pay any way you like: pre-pay (with non- expiring vouchers) or pay monthly No contracts to sign – we’re easy-going! VirginXtras (VAS) on every phone, voice portal Friendly and easy to access Customer Service
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Virgin Mobile Economic Model is Key to Success MVNO model has low capital intensity Outsource partner management Brand marketing efficiency Low operating cost base – designed for consumer market economics Prepay proposition highly cash efficient
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Economic Model It Works! From growing start-up company in 2001 to strong bottom line results in 2003 EBITDA achieved alongside fast customer growth
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Strong Customer Growth and Market Share
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Best in class ARPU OperatorDate reported Annual No Line Rental ARPU Virgin Mobile Orange mmO 2 Vodafone Dec 31 2002 Sept 30 2002 Dec 31 2002 Sept 30 2002 £136 £124 £117 £121
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2002 Performance Highlights 938k net additions, subscriber base up 65% to 2.38m Revenue increased 65% to £288m EBITDA of £16m, 37% better than plan Over 90% of customers would definitely/probably recommend Virgin Mobile to friends
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2003 – “The business model comes of age”
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Virgin Mobile The Outlook – Making money from higher bandwidth High potential of our customer base - culturally open to using new services –person-to-person communication (voice, text, chat, picture messaging, etc) –Sport, fun, sex, personalisation A brand that already provides consumers with entertainment, music, travel, and banking Business model based on what we do best –Exciting service experience – “its show business”
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Virgin Mobile The Outlook – UK and Beyond UK business at the ‘tipping point’ –Concept proven –Growth accelerating despite slowing market –Financial strength to develop further Becoming established outside European arena –US –Australia Virgin Mobile is the ‘hot property’ in Europe –Courted by numerous players –Market share opportunity for incumbents –VM not bound by geography and licenses
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Thank You Damian Blackburn Head of Commercial Development Damian.Blackburn@Virginmobile.com
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