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Dubai’s Friendi eyes six markets after Virgin deal
Dubai group Friendi plans to expand into six more countries within four years after the mobile virtual network operator (MVNO) agreed a strategic partnership with Richard Branson's Virgin Group, its chief executive told Reuters on Sunday.
June 10, 2012 5:51 by Reuters
Dubai group Friendi plans to expand into six more countries within four years after the mobile virtual network operator (MVNO) agreed a strategic partnership with Richard Branson’s Virgin Group, its chief executive told Reuters on Sunday.
Under the deal, Friendi will add Virgin Mobile’s South African unit to its existing MVNO licences in Omanand Jordan. The company will be renamed Virgin Mobile Middle East & Africa, with Virgin holding a minority stake to become the largest shareholder in the new entity.
No financial details of the transaction were provided.
MVNOs lease excess capacity from conventional telecoms operators and typically pay them a percentage of their revenue.
The new company will have more than one million subscribers, with about 300,000 from Virgin Mobile South Africa and the remainder from Friendi’s Jordan and Oman operations. Friendi also provides branding and advisory services to Saudi Arabia’s number three telecoms operator Zain Saudi.
“We have a target of growing to 5 million customers by 2015, so adding about a million customers per year for the next three to four years,” Friendi Chief Executive Mikkel Vinter told Reuters.
“It’s partly growth in existing markets, but also reasonably fast expansion across new markets. We have an ambition to get to 10 markets from the four we have today within a three- to four-year timeframe.”
He declined to reveal which countries the company was targeting.
“We are looking at some markets in the Middle East, North Africa, Sub-Saharan Africa and in South Asia,” said Vinter.
“We have an ambition of at least one additional launch later this year.”
The Virgin tie-up will likely be concluded within two months, pending regulatory approval.
“It’s essentially a cash and shares deal where we’re getting the South African business, the brand licence and some cash and they’re getting some shares,” he said.
This will also boost Friendi’s plans to launch an initial public offering within the next two years.
“Virgin has an impressive track record of listing its businesses, which will give comfort to the exchanges and investors,” added Vinter.
“There are two important parameters – the market needs to be ready, which is currently not the case, and we need to be ready, which is also not the case.”
Vinter said no financial advisors had been named for the potential float.
(Reporting by Matt Smith; Editing by Dinesh Nair and Mark Potter)