Gulf Investment Corporation (GIC), a financial institution wholly owned by the six GCC countries, is investing $50 million in Virgin Mobile Middle East & Africa (VMMEA), a Dubai-based MVNO (mobile virtual network operator) group with operations in countries including South Africa, Oman and Jordan.
When the deal is completed, GIC and the Virgin Group will be the two biggest single shareholders in VMMEA, alongside prominent global and regional shareholders including, ePlanet Capital, Dolphin International, NTEC and Millennium Private Equity.
VMMEA, which is by far the biggest MVNO group in the MEA region, was formed last year through the merger of Dubai-based Friendi Group and Virgin Mobile’s operation in South Africa.
Sir Richard Branson, founder of Virgin, said: “Virgin Mobile is the leading MVNO operator in the Middle East and Africa with operations in Oman, Jordan, Saudi Arabia and South Africa. We intend to create a large regional mobile telecom player reaching more than 10 million customers. The investment by GIC is an important show of support by an important institutional investor for our ambitious plans.”
Ibrahim Al-Qadhi, CEO at GIC, added: “GIC supports the growth of companies that have innovative and pan-regional business models. VMMEA has such a model and targets a niche market in telecommunications in the GCC. This is an important sector for the region and VMMEA is the perfect partner for existing mobile operators.”
Mikkel Vinter, CEO and founder of VMMEA, said that the next phase of liberalisation in the MEA region’s telecoms sector looks set to support the growth of MVNOs. “We are thrilled to make this strategic investment in VMMEA,” he said. “The company has a great track record of partnering with regional telecom operators to deliver value to mobile subscribers. We look forward to working with the management team in VMMEA to support the further expansion of its existing operations as well as entering new markets across the region.”
VMMEA is building its regional roll-out on the MVNO model, of which Virgin Mobile was an early pioneer. VMMEA intends to use Virgin’s experience and customer-focused business approach to roll-out operations across the MEA region.
Saudi Arabia is expected to be the next big opening for MVNOs. The country is due to auction three MVNO licences later this year.