No Virgin Birth of 3G This Christmas

November 19, 2004 - source: BWCS

UK MVNO Virgin Mobile is to launch 3G services next year. The company, which is still majority owned by its founder, the serial entrepreneur Richard Branson, has been trialing the new services for several months and says it will have a full range of handsets and services available by the second half of 2005.

Floated in July, Virgin Mobile announced plans yesterday to pay a dividend to its shareholders for the first time. The company will expand its current data services, known as Bites, to include more games, news and other information services and offer it as Bites 3G. According to Virgin Mobile’s CEO, Tom Alexander, speaking to the London-based Guardian newspaper this morning, "We do not need to trumpet our 3G plans because we do not have to justify spending billions on a licence. We don't quite see it as a step change - we see it as a natural evolutionary step."

Alexander played down the efforts of Vodafone and 3 to make this Christmas a major buying period for 3G phones, "It's definitely not a 3G Christmas this year, it might be next year", he said. In particular he seemed to single out the antics of the Hutchison-backed 3, which is aggressively going all-out for market share. The Virgin chief accused the newcomer of acting "quite crazy, from a normal person’s point of view".

Alexander insisted that his company will pursue balanced and sustainable growth and the recent half year figures for Virgin Mobile seemed to support his thesis. For the six months to the end of September 2004, it managed to increase revenues by 24% to £257 million, operating profit rose 42% to £457.3 million. It also managed to add nearly 650,000 new customers in the six month period.