Friendi Group, the mobile company known as Virgin Mobile Middle East and Africa, is looking to launch an initial public offering in the next two years.
Middle East mobile operator Friendi plans IPO
Friendi Group, the mobile company known as Virgin Mobile Middle East and Africa (VMMEA) is looking to launch an initial public offering in the next two years.
The Dubai-based company was the region's first so-called mobile virtual network operator (MVNO), winning a licence in Oman in 2008. Since then it has expanded to Jordan and Saudi Arabia and boasts 1 million customers.
Earlier this year Friendi partnered with the UK's Virgin Media Group to expand its reach in the region. Virgin is now the biggest single shareholder with a "significant minority stake".
"Hopefully with this new sign- up with Virgin, we think we are in an even better position in the market [and] our plans to IPO remain," said Mikkel Vinter, the chief executive officer of VMMEA.
"We are going through a process now where are rebranding some of the business. We obviously want to see some of that on the ground before we take the next steps."
VMMEA has yet to decide where to list. While its headquarters are in Dubai, Mr Vinter says the firm is open to listing elsewhere depending on market conditions.
"It is something we will discuss with our advisers at the time. It is not a decision we have taken yet," said Mr Vinter.
Unlike traditional mobile phone operators, MVNOs do not build their own infrastructure. Instead, they buy mobile voice minutes and data access on a wholesale basis from an existing operator and sell them as a retail product.
MVNOs tend to segment the market, offering services tailored to a specific user in mind. They also help to increase competition.
"We are now Virgin's vehicle in the MVNO space for Middle East and Africa and some countries in South East Asia," said Mr Vinter.
In 2010 Virgin Media Group launched an MVNO operation with Qtel in Qatar but was disbanded after it was decreed the licence was in breach of the country's regulatory framework.
The second operator, Vodafone Qatar, argued that its licence, obtained in 2007, stipulated that no new operators would enter the market for a set period of time. Mr Vinter hinted at targeting the Qatar market again.
"We have reasonably ambitious plans for 2013. We are targeting a few countries in the region.
"We will launch the Virgin brand in our existing markets alongside the Friendi brand, which will stay very much focused on international customers. Virgin is more for the young at heart segment," said Mr Vinter.
VMMEA is hoping to gain 10 million customers within the next five years.