Asia Times: SingTel, Virgin announce US$1bn venture


	May 20, 2000	atimes.com

Southeast Asia

SingTel, Virgin announce US$1bn venture
SINGAPORE - SingTel Mobile and Virgin Management Ltd have signed a Memorandum of Understanding to create a US$1 billion venture to offer cellular services throughout most of Asia and Internet services in Singapore.

SingTel Mobile and Virgin told the Singapore Stock Exchange that under the memorandum they would negotiate and finalize definitive agreements by August 2000. The two companies will each have a 50 percent shareholding in a new enterprise, Virgin Mobile (Asia) Pte Ltd, to be headquartered in Singapore.

Both parties have agreed to an initial start-up valuation of US$1 billion. The first tranche of US$100 million will be provided equally by both shareholders on completion of the definitive agreements. Virgin Mobile is expected to introduce services in the first quarter of 2001.

The companies said their initial target markets would be Singapore, Hong Kong and South Korea, three of the most developed economies in Asia where demand for cellular services remains high. The combined population of these three markets exceeds 55 million and the average cellular penetration of less than 50 percent still lags behind the 70-odd percent found in Scandinavian countries like Finland and Norway.

Virgin Mobile will function as a regional virtual mobile network operator, buying cellular airtime, on a wholesale basis, from a leading local cellular service provider in each market, such as SingTel Mobile in Singapore. It will, however, manage its own marketing, billing and customer care functions. In Singapore, the company will also offer narrow and broadband Internet services.

Lucas Chow, SingTel Mobile's CEO, said: ''The venture supports the SingTel Group's effort to be a leading info-communications player in Asia. It reflects our willingness to invest in and exploit exciting business opportunities in the region. Virgin Mobile has been a huge success in the United Kingdom, and we are confident that Asia will likewise embrace the Virgin brand.''

Sir Richard Branson, founder and chairman of the Virgin Group of companies, added: ''Following the expansion of Virgin Atlantic Airways into the Asian market, and our retailing successes in Japan, we decided at the end of last year that the time was right to expand Virgin's presence in Asia. This ground-breaking agreement with SingTel Mobile is a very important step on that road, as there are no existing regional brands in mobile telephony in Asia. Indeed, there are no global consumer brands in the mobile business and it is our ambition to become the first.''

Sir Richard said the venture would be modelled on Virgin Mobile launched in the UK last November as the world's first virtual mobile network operator.

(Asia Pulse)

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©1999 Asia Times Online Co., Ltd.