Du owner to bring Virgin Mobile brand to UAE
Emirates Integrated Telecommunications Company (EITC), the company behind the telco du, will launch a mobile services offering under the Virgin Mobile brand in the UAE, said Osman Sultan, its chief executive.
Mr Sultan said yesterday that du had begun restructuring some of its business lines during April/May of last year, with “tens” of jobs being cut to streamline operations. Du’s third-quarter earnings fell by 6.7 per cent because of slowing growth of its traditional connectivity services business and increasing royalty payments to the federal government.
EITC has signed a multi-year licensing deal for the exclusive use of the Virgin Mobile brand, with a view to offering services and tariffs geared towards younger consumers.
Virgin Mobile branded services will be introduced “within weeks”, Mr Sultan said, declining to give details about specific products or distribution channels. “The key objective of launching Virgin Mobile is to introduce a new customer experience for a niche consumer market,” he said. “Launching another brand alongside du will cater to the needs of a specialised segment. Virgin Mobile is a well-known brand appealing to young people and that’s why we partnered with them.”
Virgin Mobile will offer branded services distinct from those of du, although services from both brands will be delivered over the same network infrastructure. The brand in the UAE will be headed by Karim Benkirane, the former chief executive of Virgin Mobile in Saudi Arabia, and managed by a small team working within EITC, said Mr Sultan.
The Virgin Mobile brand was introduced in the UK in 1999 and is in use in more than 10 countries including Australia, Canada, Saudi Arabia, and Oman.
“The Virgin Mobile brand could well prove to be popular in the UAE, or at least with some fairly substantial segments because of its youth market and international associations,” said Matthew Reed, a Dubai-based analyst with consultancy Ovum.
Virgin Mobile has racked up more than 2 million subscribers in Saudi Arabia since its launch there in 2014, he said. “Although that 2 million only represents about 4 per cent of all mobile subscriptions in Saudi Arabia, [offerings like Virgin Mobile] usually only aim to address a specific niche audience.”
The brand is typically run using a mobile virtual network operator (MNVO) model, whereby a separate company offers services while using the network infrastructure of an existing operator. MVNOs typically require licensing by national telecoms regulators, with no such framework currently in place in the UAE.
But EITC’s agreement differs in that the holding company has acquired the rights to use the Virgin Mobile brand, with no third party company involved in the day-to-day service offering, thereby negating the need for an MVNO licence.
“This is not a third operator, this is not a new licence, this is not an MVNO,” Mr Sultan said. “The introduction of the Virgin Mobile brand is under the full ownership of EITC.”
Mr Sultan told The National that the licensing deal for the Virgin Mobile brand ran over more than five years but declined to give further details.
A spokeswoman for the Telecommunications Regulatory Authority (TRA) told The National that the regulator had given approval for EITC to offer mobile services under the Virgin Mobile brand.
Du’s shares ended yesterday’s trading session down by 0.3 per cent at Dh6.
Updated: January 31, 2017 04:00 AM