SOUTH AFRICA – Mobile virtual network operator (MVNO) Virgin Mobile which was launched on Cell C’s network is closing shop in South Africa’s after 15 years of operation on 1 November 2021.
The decision to shut up shop comes after the business was placed into voluntary business rescue in November 2020.
The company said at the time that it had become necessary to seek business rescue to restructure the company and stave off collapse.
It’s now clear that it wasn’t possible to save Virgin Mobile South Africa, with the company announcing on its website that the decision was taken due to big shifts in the South African mobile market.
“In recent years, the market has changed considerably, and a combination of tough trading conditions, strong competition and the economic stress posed by Covid-19 means that it has been a challenging market for Virgin Mobile South Africa,” it said.
Since the business was placed into business rescue, the company’s management team – led by Zak van der Merwe – has worked with stakeholders to try to save it and it is understood that Van der Merwe will leave the business, reports TechCentral
“As part of the business’s new strategy, it will be completely rebranded as its new go-to-market strategy is implemented. As such, the business will cease trading as Virgin Mobile from 30 November 2021,” it said.
Existing Virgin Mobile customers will be contacted before the closure and given the option of switching to Telkom’s network or canceling their contracts.
“Telkom is offering exclusive deals to anyone switching to its service from Virgin Mobile,” according to a notice on the Virgin Mobile website.
However, most customers still on Virgin Mobile are believed to be prepaid users.
Van der Merwe said in November 2021 that the business had recently changed shareholding but declined to comment on specific questions about the shareholder make-up, or whether Richard Branson’s Virgin Group remained invested.
Launched in 2006 as a joint venture between Sir Richard Branson’s Virgin Group and Cell C, Virgin Mobile South Africa established itself as a dynamic and growing brand with stores nationwide.
The South African MVNO space has witnessed a surge in the form of new players coming to market in recent years.
While it’s been dominated by Cell C, with MVNOs such as FNB Connect, me&you and Mr P Mobile piggy-backing on the telco’s network over the years, SA’s MVNO market recently saw retailer Pick n Pay introduce an MVNO product – PnP Mobile – the first to launch on the MTN network.
Others such as the Shoprite Group and Standard Bank have also rolled out their MVNO offerings.
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