Delta Partners enters Russian market with Virgin Connect

Delta Partners will be presenting a workshop on telecoms branding at MECOM on May 28, commencing at 8.30am. Given recent developments the company appears well placed to be doing so, as earlier this week it announced it had entered the Russian telecoms market in collaboration with Virgin Group.

Kristoff Puelinckx, managing partner of Delta Partners believes telecoms operations in emerging markets remain primed for growth.

Together the two companies plan to establish a new broadband access provider, Virgin Connect, having both invested in Trivon Group, a Swiss-based telecoms holding company providing Internet services in Russia.

Eurasia Capital Management is also an investor in Trivon Group. Virgin Connect will provide broadband Internet connectivity, voice and value-added services to both residential and corporate markets.

The company holds licences and frequencies for WiMAXbased services, and is currently deploying its network in 32 Russian regions, including the main cities Moscow and St. Petersburg.

With a population close to 140 million, Delta Partners estimates total revenues in the telecoms sector in Russia amounted to more than US$35 billion in 2007.

“We truly believe there is a huge opportunity to generate value for Russian customers through the deployment of innovative propositions that will significantly contribute to the rapid development of the local broadband market,” said Kristoff Puelinckx, managing partner of Delta Partners.

“While the broadband market in Russia is still under-penetrated, it is expected to reach 35 per cent penetration in the next five years. This presents huge potential in establishing a global brand-name in an emerging market such as Russia.” Puelinckx added.

Founder of the Virgin Group, Richard Branson, said he was delighted to announce Virgin’s first business in Russia. “We have entered Russia with Virgin Connect because we believe the potential for growth in the Russian broadband market is extremely exciting,” Branson declared.

“Virgin Connect will demystify the complex tariff jungle and bureaucracy seen in the market over the last years. We will provide a fresh and human customer experience to Russians and believe that Trivon Group is the ideal partner to deliver this.”

Branson added that Virgin Connect plans to gain a market share of 10 per cent within five years.

Delta Partners will support the management team led by Rostislav Gromov, general director of Trivon’s Russian operation, in the commercial expansion of Virgin Connect.

The advisory and investment firm has experience in broadband rollouts in the Middle East and Africa, and will leverage its combination of strategic advice and a hands-on pragmatic approach in the joint venture.