Virgin Mobile UK

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Virgin Mobile Telecoms Ltd
Type Subsidiary
Industry Mobile Phones
Founded 1999
Founders Thomas Alexander, Sir Richard Branson
Headquarters Swansea, Wales, United Kingdom
Key people Tom Mockridge (Managing Director)
Products Mobile Telephony
Revenue Increase GB£563 million (2006)
Net income Increase GB£66 million (2006)
Owners Liberty Global
Employees 1,700
Parent Virgin Media
Website www.virginmobile.co.uk

Virgin Mobile UK is a mobile phone service provider operating in the United Kingdom, and a subsidiary of Virgin Media. The company was launched by Virgin Group in 1999 as the world's first Mobile Virtual Network Operator (MVNO). As a virtual network operator, Virgin Mobile does not maintain its own network, but instead has contracts to use the existing network of EE (originally One2One at the time Virgin launched).

NTL:Telewest bought Virgin Mobile on 4 April 2006 and rebranded itself as Virgin Media on 9 February 2007. Virgin Mobile became part of the quadplay of Virgin Media services and received a new logo in-line with its parent. Virgin Media was subsequently purchased by Liberty Global in 2013.

Virgin provide pay as you go and contract mobile packages, as well as mobile broadband services. It sells its services directly, as well as through Virgin Media's retail stores.

History[edit]

Virgin Mobile was launched in November 1999 as a private joint venture between One2One (later T-Mobile) and the Virgin Group.[1] The joint venture involved leasing network bandwidth from One2One and re-selling it under the Virgin Mobile brand, making it significantly cheaper to run than if Virgin operated its own network infrastructure.[2]

The company reported its first annual profit in 2003, following successful Christmas sales.[3]

In 2004 Deutsche Telekom sold their 50% holding in Virgin Mobile to the Virgin Group, with the agreement that if the company were to become public in the following two and a half years they would receive 25% of the proceeds.[4] The two companies had previously argued over the terms of the agreement made in 1999 and Richard Branson had filed a High Court action against T-Mobile.[5]

Richard Branson had considered making Virgin Mobile public in 2002.[6] Eventually dealing in shares of Virgin Mobile began on 21 July 2004,[7] with 37% of the companies made available for sale as an initial public offering. The remaining shares were held by the Virgin Group.[8] At the time the company had 4.1 million customers, employed 1,400 staff in the UK and the listing valued the company at £500m.[9]

Acquisition[edit]

Virgin Mobile's former headquarters in Trowbridge, Wiltshire

In December 2005 it was announced that Virgin Mobile UK was in talks with NTL:Telewest regarding a sale. The combination of Virgin Mobile and NTL:Telewest would create the United Kingdom's first "quadruple play" media company, bringing together TV, broadband internet access, mobile phone and fixed-line phone services, and allowing NTL:Telewest to use the Virgin brand.

Under the deal, Virgin owner Sir Richard Branson was understood to be planning to swap his controlling 72% stake in Virgin Mobile for a 14% holding in NTL:Telewest, which would make the billionaire entrepreneur the biggest single shareholder in the combined group, and give him a share of future revenues.

The original bid of £817 million ($1.4 billion) was rejected by Virgin Mobile's independent directors, who took the view that NTL:Telewest's bid "undervalued the business." Sir Richard Branson was reported to be confident that a restructured deal could be completed. The offer was increased in January 2006, to £961m, or 372p per share.

On 4 April 2006, NTL:Telewest Incorporated announced a £962.4m recommended offer for Virgin Mobile. The offer had three options: 372 pence per share in cash; 0.23245 new NTL:Telewest Inc. shares for each Virgin Mobile share, worth 389p; or a 0.18596 of an NTL:Telewest share, and 67p in cash, worth in total 387p.

Branson indicated that he would accept the third option. This led to him receiving at least a 10.1% stake in the newly enlarged NTL:Telewest, and helped to fund the increased 372p per share in cash for the minority shareholders.

The independent directors of Virgin Mobile indicated to NTL:Telewest that they "intended unanimously to recommend that Virgin Mobile shareholders vote in favour of the scheme." NTL:Telewest acquired Virgin Mobile on 4 July 2006, delisting it from the London Stock Exchange and leaving Virgin Group with a 10.5% shareholding. NTL:Telewest rebranded under the Virgin Media name on 8 February 2007.

Services[edit]

Virgin Mobile sells pay as you go and contract airtime as well as mobile phones.

The company also provides mobile broadband services with speeds of up to 7.2Mbit/s and allowances of 1 and 3GB depending on the chosen package, provided through the EE 3G network. The service includes a Huawei E160 USB modem dongle painted black with a silver Virgin Mobile logo.

Mobile phone and broadband services are also marketed through Virgin Media and its high street stores.[10]

Following the 2010 merger of T-Mobile and Orange to form EE, many Virgin Mobile customers are able to use any phones previously locked to either of these companies, but as Virgin roams on other networks, EE SIM cards will not work in phones locked to Virgin. However, the merger meant Virgin Mobile customers reported losing signals where T-Mobile UK has begun decommissioning masts where Orange already has coverage and began merging their signal with Orange [11] as Virgin have contracts with a ten year contract T-Mobile until 2014.

However, as part of the merger, Virgin Mobile has a joint agreement with EE to use its masts, and will seamlessly change between a T-Mobile UK mast and an Orange mast where there is no signal from T-Mobile since early October 2011. A phone roaming on the T-Mobile masts are marked as "Virgin", whereas phones roaming the Orange masts are marked as "virgin".[12]

References[edit]

  1. ^ "Virgin Mobile reveals share range". BBC News. 7 July 2004. Retrieved 15 February 2010. 
  2. ^ "Mobile users flock to Virgin". BBC News. 3 January 2002. Retrieved 15 February 2010. 
  3. ^ "Virgin Mobile reports strong sales". BBC News. 23 January 2003. Retrieved 15 February 2010. 
  4. ^ "Virgin Mobile on road to market". BBC News. 29 January 2004. Retrieved 15 February 2010. 
  5. ^ "'Tug-of-love' over Virgin Mobile". BBC News. 10 March 2003. Retrieved 22 August 2007. 
  6. ^ "Branson may take Virgin Mobile public". BBC News. 8 March 2002. Retrieved 15 February 2010. 
  7. ^ "Virgin Mobile plans July float". BBC News. 30 June 2004. Retrieved 22 August 2007. 
  8. ^ "Virgin Mobile reveals share range". BBC News. 7 July 2004. Retrieved 15 February 2010. 
  9. ^ "Virgin Mobile makes steady debut". BBC News. 21 July 2002. Retrieved 22 August 2007. 
  10. ^ Virgin Media Mobile - Pay as you go and pay monthly phones Virgin Media
  11. ^ T-Mobile merger creates Virgin mobile blackspots PC Pro
  12. ^ Virgin connects mobile network with Orange Broadband TV News

External links[edit]