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Sat 11 Jun 2011 09:55 AM

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Branson still keen on MidEast despite Qatar blow

Virgin Mobile says still interested in regional expansion after services ordered to close in Qatar

Branson still keen on MidEast despite Qatar blow
Richard Branson Virgin Mobile
Branson still keen on MidEast despite Qatar blow
Virgin Group founder Richard Branson
Branson still keen on MidEast despite Qatar blow
Virgin Group founder Richard Branson (R) speaks during a joint press conference with Nasser Marafih, chief executive officer of Qatari telecom company Qtel, at the launch of Virgin Mobile Qatar.

Virgin boss Richard Branson is still interested in launching his Virgin Mobile brand across the Middle East despite being forced to close its services in Qatar.

The UK media company said it was disappointed by the decision taken by Qatar's telecommunications regulator to order Qatar Telecom (Qtel) to close all its Virgin Mobile-branded services in the country.

The Supreme Council of Information and Communication Technology (ictQATAR) said all Virgin Mobile branded SIM cards must be de-activated by August 4, without giving a specific reason for the action.

But the decision has not derailed Virgin's plans to expand in the region in the future, a company spokesman told Arabian Business.

"We were disappointed by the decision in Qatar – but remain interested in the region," a statement from the company said.

It added that Virgin will not rush into any decisions on where it can launch as a mobile virtual network operator (MVNO) in the region.

"We will now probably wait a little to assess the new opportunities," the statement said, adding that the company has just announced a partnership to tackle the Latin American MVNO market.

Business Monitor International said in a new report that although it believes the Middle East "is ripe" for MVNOs, it said that the Qatar experience could "mark the end of Virgin's adventure in the region".

The announcement for a complete shutdown of Virgin Mobile services in Qatar and the migration of its subscribers to other networks now leaves Qtel and Vodafone as the only mobile services brands in Qatar.

"BMI notes that the regulator's decision is likely to surprise many considering that the launch of Virgin Mobile was seen as step towards the entry of MVNOs and, by implication, increased competition in the Qatari mobile market," analysts said in a report.

"Perhaps a more significant implication of ictQATAR's decision is the immediate impact on Virgin Mobile's expansion plans in the Middle East," BMI added.

BMI said that Oman, Jordan, Saudi Arabia and Israel were possible targets for Branson due to their liberal policies on MVNOs.

"Although BMI believes many markets in the region are ripe for MVNO services, it is yet to be seen whether the Qatari experience will mark the end of Virgin's adventure in the region," it said.

According to ictQATAR, Qtel is required to transfer all existing customers currently on Qtel Virgin Mobile Service to a similar Qtel service, or provide a full cash refund.

Qtel is also required to remove the Virgin Mobile brand from the marketplace.

Virgin Mobile launched the branded mobile service in Qatar, in partnership with Qtel, in May 2010 with a strategy to target the country's youth market as it has done in other markets, such as the UK, the US, India and South Africa.

A mobile virtual network operator (MVNO) is a company that provides mobile phone services but does not have its own licence or the infrastructure required to provide mobile phone services.

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Amar 8 years ago

A monopoly only that was only recently dented by the launch of Vodafone- this move by Qtel is proof that the market is saturated and doesnt simply have enough space for another operator. Branson will seek enough compensation I am sure.