News 1999
One 2 One and Virgin Confirm Joint Venture in Mobile Telephony
01/08/1999
Two of Britain's leading consumer brands are pleased to confirm the formation of a unique joint venture in the digital mobile phone market. One 2 One and Virgin Group have today formally agreed terms for the establishment of a new company - Virgin Mobile - as a 50:50 joint venture.
One 2 One and Virgin are committing over £100m to the new start up which will be based in Trowbridge, Wiltshire.
Virgin Mobile will become the biggest mobile phone retailer on the High Street, selling its phones it more than 300 stores. Virgin Group is converting several of its Our Price stores into Virgin Mobile branded outlets, with the rest of the 220-strong chain stocking Virgin phones alongside music CDs, games and videos.
Virgin's 85 Megastores will also sell Virgin Mobile phones, and the 4.5 million passengers a year on Virgin Atlantic, the group's airline, will be offered mobiles. Virgin Mobile aims to target business and international travellers with a tri-band mobile which works in America, as well as most of the rest of the globe.
Virgin Mobile will also be sold direct by telephone and over the internet, from the company's call centre in Trowbridge.
The company is creating 500 jobs in the first 12 months, and the number of employees is forecast to rise to over 1000 within 3 years. Recruitment has already begun, with more than 5,500 applications received.
Virgin Mobile is headed by Tom Alexander who has 14 years experience in the cellular market. He joined Virgin Mobile as Managing Director from BTCellnet where he was Deputy Commercial Director. His management team combines a range of expertise from the mobile telecommunications industry and key executives from across the Virgin Group bring a wealth of marketing and brand development skills. Richard Branson is Chairman of the new joint venture and Tim Samples, One 2 One's Managing Director, joins the company's board.
The £100m investment by One 2 One and Virgin Group will fund system development, handset procurement, marketing and establish the customer service operation at Trowbridge. Virgin Mobile will be open for business in time for Christmas 1999.
Virgin Mobile customers will use a new virtual network - the UK's 5th - taking advantage of One 2 One's network capacity and quality. For convenience all customers will be offered a handsfree earpiece with their phones. Details of the phones, service, tariffs, distribution agreements, and marketing plans will be revealed later this year.
Richard Branson, founder of the Virgin Group of companies, said:
"We see this alliance as an excellent way to enter a fast-growing market which lets us bring Virgin's philosophy not just to voice telephony, but to m-commerce.
"Our vision for the future is for people to book air and rail tickets, find out information, buy music, financial services, books and whatever they choose while on-line and on the move. And we want to link customers to other Virgin services through multi-media via the mobile network. This joint venture will offer the British public a value-for-money mobile multi-media experience. One 2 One matches our own philosophies and business practices which makes us ideal partners. We know their infrastructure, in particular their high-capacity, national digital network will provide us with the level and quality of service that we must deliver for our customers."
Tim Samples, Managing Director, One 2 One, said:
"Rewriting the rules is the hallmark of both One 2 One and Virgin. We share a philosophy of breaking free from convention and doing things differently for the benefit of the consumer. Both companies share a strong vision of an exciting future for the services mobile networks will deliver and the growth opportunity taking service far beyond the person-to-person calls we know of today. We believe this joint venture is not only a natural fit, but is also testament to the way in which we have built our network. This backbone strength will ensure that our own and the joint venture's customers will receive the best possible service available."
Notes to editors:
One 2 One currently has over 2.65 million customers and has been credited with driving a mass market audience for mobile phones since its launch in 1993 through its innovative tariffing, packaging and service developments. It boasts the highest capacity network per customer of any of the UK mobile operators which means that its customers benefit from being able to make three times as many calls per user for the lowest average per minute charge. Its nationwide network is of the highest quality and includes a new technology called EFR "Enhanced Digital Sound" (Enhanced Full Rate) which improves the sound quality of a mobile call to the equivalent of one made on a fixed line. It is investing heavily in future technologies, which will enable multi-media access on the move as early as next year.
Virgin's interests span from airlines, trains and travel to financial services and retailing. With the explosion of mobile phones market and the expected further increase over the coming years, this is a natural business for the company to enter. The join venture provides one of several platforms for the realisation of Virgin's ambition to become a leading provider of e-commerce services through Virgin.com. More than 25% of the UK population already own a mobile phone, with the market set to double within the next two years.
