News 2000
Virgin Mobile (Asia) deal completes. CEO appointed
20/11/2000
Singapore Telecommunications Limited and Virgin Management Limited today announced that the two companies have signed all necessary agreements to launch Virgin Mobile (Asia) Pte Ltd. It is intended that the new business will trade in all regional markets under the Virgin Mobile brand name. The two companies are also delighted to announce the appointment of the Chief Executive Officer for Virgin Mobile (Asia) Pte Ltd, Mr. Ross Cormack.
The first tranche of funding for Virgin Mobile (Asia) Pte Ltd is US$100 million, coming equally from both parties, and representing equal shareholding. SingTel will provide up to a further US$450 million in funding in the form of a Convertible Loan to be used for regional expansion under a jointly agreed business plan.
Ross Cormack joins the company from an extensive telecommunications background, predominantly as the senior regional Cable & Wireless executive most recently responsible for Hong Kong's premier mobile operator, CWHKT Mobile Services, and previously overseeing the management of their Asian mobile businesses.
"I'm very much looking forward to building a team at Virgin Mobile who can address this unique market opportunity - expanding the world's first global Mobile Virtual Network Operator (MVNO)", says Ross.
Sir Richard Branson comments: "Buying a mobile phone in today's marketplace is a very complicated process, with hundreds of packages designed to confuse and exploit the consumer. Ross's excellent knowledge of the market and his competitive drive will help Virgin Mobile to bring simplicity, clarity, and the best possible deal for the consumer into the Singapore marketplace, as it has done in both the UK and Australia already."
Lee Hsien Yang, SingTel's President and CEO, expressed his enthusiasm for the investment. "SingTel is excited by the opportunities and potential for Virgin Mobile. We are delighted to be a partner of Virgin to bring innovative communications and services to customers in the region. SingTel seeks to expand through investments in a number of areas. Cellular is one of them. Virgin Mobile's network will complement our other investments in the region. It will enhance SingTel's regional footprint and position as a leading communications player in the Asia Pacific," he said.
The joint venture company is expected to launch in Singapore in mid-2001, to be followed by further launches in Asia, including Hong Kong and Taiwan. In Singapore, the company will replicate its model in the UK by functioning as a virtual operator, buying cellular airtime from SingTel on a wholesale basis. It will manage its own marketing, billing, customer care and tariff, and deliver mobile commerce applications, which will include Virgin's exciting range of consumer products and services, over a simple mobile interface.
Virgin Mobile in the UK, now celebrating its first birthday, is a huge success story in the British market, having attracted over 500,000 customers since its launch. The company recently won the Mobile Choice Magazine Best Network 2000 Award. Two weeks ago, the Virgin Group launched its Australian mobile business (a joint venture with Cable & Wireless Optus) and is already experiencing phenomenal consumer interest. The Virgin Group is committed building Virgin Mobile into the world's first truly global mobile brand.
"Through simple, honest value-for-money and new and exciting product innovation, we have the opportunity to bring a mobile revolution to Singapore's consumers," says Ross. "We expect to provide a fresh alternative for mobile consumers in Singapore and then throughout the region, and we also look forward to being at the cutting edge of new technologies such as 3G, as soon as the spectrum becomes available to us".
The negotiations for the joint venture were principally led by Lucas Chow, CEO of SingTel Mobile, and Andrew Craissati, the Virgin Group's regional Chairman & Chief Executive.
For further information please contact:
Ruby Khoo
Tel: 449 9330
Fax: 449 3447
email: pubpart8@pacific.net.sg
Note to editors:
About SingTel
SingTel is Asia's leading telecommunications provider with a comprehensive portfolio of services that include voice and data services over fixed, wireless and Internet platforms. Serving both the corporate and residential markets, SingTel is committed to bringing the best of global communications to its Asia Pacific customers. It has built the infrastructure that has helped transform Singapore into a global hub and is today the country's largest company in terms of market capitalisation (about US$25 billion). The SingTel Group is expanding rapidly into overseas markets, with current investments of about S$5 billion (US$2.9 billion) in more than 80 joint ventures and associated companies in 20 countries and territories. With a heritage of over 120 years, SingTel aims to be the Asian partner of choice for telecommunications operators across the world. More information about SingTel can be found @ www.singtel.com.
About The Virgin Group
Virgin is one of the world's best known brand names. Over 150 Virgin companies trade around the world in a variety of distinct business areas, including transport, travel, financial services, retailing, telecommunications, consumer goods, and the Internet.
Virgin (Asia) Management Ltd was recently formed to develop, invest in and supervise the growth of new businesses in the Asia Pacific region, with a focus on e-commerce, telecommunications and retail activities.
Existing activities in Asia are not affected by today's announcement. Virgin Atlantic Airways flies from London to Shanghai, Tokyo and Hong Kong. It also has code-share arrangements with Malaysian Airlines and a marketing alliance with Ansett. Singapore Airlines recently acquired a 49% equity stake in Virgin Atlantic's holding company for a consideration of 600 million pounds sterling. In Japan, Virgin has a number of existing business interests including Megastores, Cinemas and other consumer products. In Australia, Virgin Blue, a new low cost airline, commenced operations in August 2000 flying domestic routes within Australia and offering unprecedented fares. On Tuesday 30 October, Virgin Mobile Australia (a joint venture with C&W Optus) was launched.
The Group is currently planning numerous further initiatives in the Region.
