Mr. Deeds

On November 9, 2014, Virgin Mobile Middle East and Africa (VMMEA) introduced the Virgin brand into Saudi Arabia, following up on the October 1 introduction of its co-brand FRiENDi mobile into the same market. While the decision to launch and incorporate two mobile virtual network operator (MVNO) brands in the same market simultaneously has already set VMMEA apart from its competitors, the company’s ability to simply commercialise its operations in the kingdom is probably its largest differentiator to date

Mikkel Vinter said VMMEA is pursuing a 10x5x10 strategy, looking to be in 10 markets in five years, counting 10 million customers

Given the size of the mobile telecom market in Saudi Arabia, the licensing and subsequent introduction of MVNO services in the kingdom has been the subject of much interest given what the presence of such services could mean for other markets in the Gulf and across the Middle East in following Saudi Arabia’s example. From dozens of applicants that expressed interest in the concessions, only three were selected in June of 2013, with VMMEA having aligned itself to launch its services utilising the network of national behemoth Saudi Telecom Company.

The other two nominated candidates have met with colourful developments since their selection in 2013. UAE telecom retailer Axiom Telecom had its licence suspended and ultimately cancelled in April 2014, while Jawraa Lebara is yet to launch service, and is being affected to some degree by the internal issues at its network operator partner Mobily, where in November 2014 long-standing CEO, Khalid Al-Kaf was suspended as an investigation into accounting errors and inconsistencies at the cellco was launched.

Thus, as of the first quarter of 2015, VMMEA was the only MVNO of the three originally picked to have launched commercially in the kingdom.

“We believe that our two-brand approach into the Saudi market is all about segmentation,” Mikkel Vinter, founder and CEO of VMMEA told Comm. “FRiENDi mobile has been positioned to appeal to the many various expatriate communities who reside within Saudi Arabia, while the recently introduced Virgin Mobile brand is targeted at the youth market and those who are young-at-heart.”

Vinter was always keen to have VMMEA launch in the kingdom first and enjoy some first-mover advantage over the other licensed MVNOs, and the extended period of time the company has been inadvertently offered to operate exclusively is an opportunity that is not wasted on the company’s management.

“We don’t think launching two brands into the market around the same time will lead to cannibalisation of the offerings. We have devised completely different products and bundles for each segment, and so for example the Virgin Mobile starter-pack includes three SIMs as we are aware customers use multiple devices nowadays, including tablets, phones and Internet routers,” Vinter said.

“For the more tech savvy young people in the kingdom, we have a package that allows Internet to be shared across multiple SIM cards and devices. Customer experience is very important and we have spent a great amount of effort recruiting and training the right talent. Virgin is a global brand experience, and we are trying to replicate the international success in Saudi Arabia,” Vinter added.

The launch of Virgin branded services in the market has led to the opening of branded kiosks and shops, with service and pricing innovations being central to VMMEA’s proposition. Social media is also playing a key role in raising awareness of the recently launched services, and the communication of the latest devices and packages available.

VMMEA enjoys a significant head-start in Saudi Arabia compared to its competition

Without wanting to give away commercially sensitive information, Vinter said the launch of the Virgin brand into the market had gone well, with the early efforts being concentrated on the opening of more retail shops in more cities across the kingdom. Given the growth and popularity of mobile data services in Saudi Arabia, Vinter said VMMEA was competitive in this respect, and that he was keen for the company to establish a strong foothold in the market, ahead of any further competitors.

“Saudi Arabia is the largest market in the region and we obviously want to do well there,” Vinter concluded. “North Africa is another region of interest for us and we are looking at opportunities there, and overall VMMEA’s direction is positive as we continue to look to achieve our stated ambition to be in 10 markets in five years, with a total customer base of 10 million.”