Two months away from its launch date, the fourth entrant to SA`s cellular market is playing it quietly confident THE EAGERLY-AWAITED June-July launch of Sir Richard Branson`s Virgin Mobile brand in South Africa is expected to shake things up in the local mobile market lammed by the regulatory authority, among many others, as lacking real competition.

Virgin Mobile SA (VMSA) will be trading on the fun, yet efficient Virgin Mobile brand, but using 50% joint venture partner Cell C`s network and infrastructure, in its bid to wrest some of Vodacom and MTN`s more sophisticated and cash-flush customers from them.

"We believe customers are taken for granted in this country," maintains CEO Sajeed Sacranie.

He explains that in addition to its strong brand, pricing simplicity, differentiated services (including a music-centric offering aimed at "the young and young-at-heart"), superior customer service will be VMSA`s main selling point.

"We`re not only in the business of selling phones and airtime, but also customer service," he explains, a philosophy that has guided its recruitment process.

VMSA launched its website earlier this year, with a call for applications, and within three days had received some 600 CVs. "We`ve been through thousands of CVs and have recruited about 300 people to date. We`ve really attracted some of the best people in the customer service sector," Sacranie enthuses. Some 200 of these staff members will be based at VMSA`s call centre, located in the heart of Sandton.

The mobile challenger will be investing some R750 million into getting VMSA off the ground, that is, setting up business infrastructure and creating a retail distribution channel, in addition to hiring staff and opening its call centre for customers.

"We`re in the process of `Virginising`, or localising the relevant Virgin software systems - we`ve brought Virgin intellectual property from other markets to South Africa," he explains.

It plans to launch in about 90% of SA`s shopping malls in June or July, with an initial six dedicated retail outlets (the number of which will double within 12 months) in upmarket shopping malls, and representation through third-party retail stores, including Woolworths and New Clicks` Musica chain.

"Considering Virgin`s pedigree in music, we have a particularly strong and credible partnership with Musica," says Sacranie.

When queried as to the timing of its launch, which conveniently coincides with the introduction of number portability to SA, he laughingly observes that the move was not planned, but that "the planets were aligned" in its favour. And its business model does not rest on market churn, he insists.

Although VMSA will be pursuing both the contract and prepaid user market in SA, it`s after the big-spending contract segment of the market in particular.

Cell C`s customers include very few big spenders, according to media reports, with users spending an average of R120 a month, well below the average customer spend of R168 enjoyed by MTN and R147 for Vodacom.

"There is a very real intent to create a sense of being part of the Virgin family. If you are a member of the family, then benefits will accrue to you," he says of its strategy, referring to possible deals and discounts with local sister companies Virgin Active, Virgin Atlantic, and the recently-announced Virgin Money venture, expected to become operational mid-year.

"I`m being deliberately vague," he confesses, as he`s not keen to give the game away ahead of launch, which promises to be a much-hyped event graced by the Virgin king himself.

"But over time there will be a kind of loyalty programme," accedes Sacranie.

Though it will reward customers` loyalty, it has no intention of dramatically undercutting the call charges of the other operators. "But pricing will be competitive and our service levels the best in the industry," he says confidently.

"However, the incumbents are hugely successful, and we wouldn`t underestimate them by any stretch of the imagination. They`re going to do whatever they can do to retain their market share."

VMSA is aiming for 10% of the market within five years, putting it more or less on a par with Cell C. Vodacom has some 60% and MTN about 30% of the 30 million-user market, although this number is expected to climb to some 40 million users in the next few years.

The tie-up with Cell C, under discussion for more than a year, will see VMSA piggybacking off Cell C`s licence and network infrastructure, valued at some R10 billion. The deal has in no way been affected by the recent acquisition of Virgin Mobile by NTL for close to a billion pounds, assures Sacranie, as each Virgin entity is ring-fenced for corporate governance purposes.

As for following in the footsteps of its parent and becoming a quadruple player, providing TV, mobile, fixed-line and Internet access, VMSA considers this a long-term option. "The market is not sufficiently open at the moment, but in the future, who knows?"