Virgin Mobile Singapore folds after one year –

Proving the difficulty of breaking into a near-saturated market, operator Virgin Mobile Singapore Pte. Ltd. will close its doors in October, after one year's operation, the company said in a statement Tuesday.

Virgin Mobile Singapore was the first of what was to have been a pan-Asian mobile rollout for Virgin Group Ltd. and its 50:50 joint venture partner Singapore Telecommunications Ltd. (SingTel). The two companies had earmarked US$100 million to roll out services in Hong Kong, Taiwan, Malaysia, India and China through a company called Virgin Mobile (Asia) Pte. Ltd., which launched Virgin Mobile Singapore.

Following the failure of its first attempt to break into the Asian market, that expansion is under threat.

"Given the market conditions, it'll now be a cautious approach to regional expansion," SingTel spokesman Ivan Tan said. "The board of directors has representatives from both shareholders and they will evaluate the situation."

Virgin Mobile Asia was originally set up with a regional management team based in Singapore tasked with planning the multi-country rollout. That team was dissolved in May, as conditions in the telecommunication industry meant that growth targets and expansion plans began to be scaled back.

Virgin Mobile Singapore started operating as an MVNO (Mobile Virtual Network Operator) in October last year, leasing network from SingTel and using SingTel services. These were rebranded in Virgin's youth-oriented style to compete with the entrenched operators.

Virgin Mobile Singapore signed up around 30,000 subscribers, the company has said previously, or around 1 percent market share, as Singapore consumers preferred the lower charges of the existing operators over the new features Virgin Mobile introduced.

Virgin will migrate its customers over to SingTel between now and October, according to the statement. The company employs just over 100 people in Singapore, including many at a S$1 million customer contact center which opened in March.

Singapore has three mobile operators -- SingTel Mobile, Mobile One Asia Pte. Ltd. and StarHub Pte. Ltd., who between them have racked up 3.03 million subscribers, a penetration rate of 73.3 percent, according to Infocomm Development Authority (IDA) of Singapore figures.

This story, "Virgin Mobile Singapore folds after one year" was originally published by ITworld.


Copyright © 2002 IDG Communications, Inc.

Shop Tech Products at Amazon