SingTel, Virgin announce details of JV

SINGAPORE--Singapore Telecommunications Ltd and Virgin Management Ltd Monday said they have finalized their joint venture agreement to offer mobile telecommunications services in Asia.

The 50:50, US$100 million joint venture, to be called Virgin Mobile (Asia) Pte Ltd, follows a memorandum of understanding signed by both parties in May this year.

Specifically, Virgin Mobile Asia's newly appointed CEO Ross Cormack told Singapore.CNET.com at the sidelines of the press conference that the joint venture company will be offering "mobile voice telephony with a number of bundled Virgin products and services including travel, entertainment and music." He did not elaborate further.

Under the latest agreement, SingTel will enter into a convertible loan agreement with Virgin Mobile Asia whereby SingTel will grant the latter a secured convertible loan facility of up to US$450 million to be used for regional expansion under a jointly agreed business plan.

"SingTel can convert that loan into stock in Virgin Mobile Asia under certain terms," Cormack said. He declined to disclose those terms.

Virgin Enterprises Ltd, meanwhile, will enter into a trademark licence agreement with Virgin Mobile to grant the latter a 30-year, extendable licence to use various Virgin trademarks in the Asian region.

Singapore Telecom Mobile Pte Ltd (SingTel Mobile) will also enter into a telecommunications supply agreement with the joint venture to supply telecommunications services to Virgin Mobile Asia in Singapore, the companies said.

To launch in S'pore mid 2001, hire 200 staff

Virgin Mobile Asia is expected to launch here mid 2001, followed by further launches around Asia in the next 18 months, including Hong Kong and Taiwan.

Already present in the UK and Australia markets, Virgin Mobile claims to have attracted over 500,000 UK customers since its launch there a year ago. On October 30, 2000, the Virgin group also launched Virgin Mobile Australia, a joint venture company with Cable and Wireless Optus.

"In Singapore, the company will replicate its model in the UK by functioning as a virtual operator, buying cellular airtime from SingTel on a wholesale basis. It will manage its own marketing, billing, customer care and tariff, and deliver mobile commerce applications, which will include Virgin's...range of consumer products and services over a simple mobile interface," said Virgin Mobile Asia in a statement.

Added Cormack, the services will be offered with "no contracts and no monthly fees...It's as simple as (paying) for whatever services you use...We believe that consumers need to get a fair deal."

Towards this end, the joint venture is planning to hire more than 200 employees, including sales, customer service and billing personnel, said Cormack.

When asked whether Virgin Mobile Asia would be offering Internet services in Singapore, Cormack replied that the agreement with SingTel includes offering consumers here narrowband and broadband Internet services. "We're still in the planning phase and we will determine specific Internet access products as we go forward."

3G plans hinge on SingTel win

"Through simple, honest value-for-money and new and exciting product innovation, we have the opportunity to bring a mobile revolution to Singapore's consumers," Cormack said in a statement. "(We) look forward to being at the cutting edge of new technologies such as 3G (third generation networks), as soon as the spectrum becomes available to us."

However, he pointed out that while Virgin Management Ltd has an agreement to deliver 3G with SingTel, it would "all depend on whether SingTel wins the 3G license."

Last month, the Singapore government announced that a total of four 3G mobile licenses would be awarded via an auction, which will begin at S$150 million.