Alan Gow, the new group CEO of Virgin Mobile MEA on the launch in UAE and how the company differentiates itself as a consumer favourite with a digital start-to-finish strategy.
The excitement around the beta-launch of Virgin Mobile UAE got even better as CommsMEA spoke to the new group CEO of Virgin Mobile Middle East & Africa (VMMEA), Alan Gow. Gow comes with an extensive Virgin senior leadership profile, having been a co-founder of the original Virgin Mobile in the UK alongside Sir Richard Branson.
Super pepped up with the interest Virgin Mobile UAE has managed to garner from the pre-registration stages itself, Gow is confident of the Virgin brand soaring to new heights in the coming times.
Explaining the business model in the UAE, Gow says: “It’s an interesting and different model for Virgin Mobile. EITC owns the business and operates the Virgin Mobile UAE brand. Virgin Mobile MEA has an advisory relationship with them. We are involved in the development and design of the product. We are involved in the management, as well, but in an advisory capacity. We have no equity in VMUAE. The Virgin Group, which is the owner of all the different Virgin brands, has a licensing relationship with the EITC.”
He adds that considering that Virgin Mobile has a unique way of presenting itself to the customers, it is very important to make sure that the Virgin brand is protected. “Fortunately, EITC understands the brand very well.”
However, wouldn’t an independently owned business be a more lucrative option? Gow explains that the decision to enter with such a different model has been well-thought over. “There’s no immediate prospect of regulations allowing a MVNO in the UAE. And yet we know the Virgin brand will go down very well here, so we are more than happy to do it this way. And moreover, it helps VM MEA story in the region to have this presence in such a dynamic market. With EITC’s expertise, network, and resources, I am sure they will do a really good job with VMUAE.”
Ruling out assumptions around two competitive brands under the EITC umbrella, Gow says that it wouldn’t be a problem since EITC has the expertise and market knowledge to target various segments of the market with the two brands. He adds that, this would be quite a beneficial step for the UAE consumers, as the entry of Virgin will spark off a new wave of innovation in the mobile service market. “If you look at how we have positioned Virgin Mobile in the UAE, it’s a fully digital start-to-finish product. Du doesn’t have such an offering today. Etisalat is trying to do it. So, EITC instantly gets the first-mover advantage with the Virgin brand. There are plenty of customers in the UAE to target, and having a second brand will help EITC enormously to catch up with Etisalat,” Gow says.
Virgin Mobile UAE has made the whole process of getting a new connection as simple as a matter of few clicks. The user doesn’t need to queue up to talk to someone or get a SIM card. Gow believes the VMUAE strategy places the brand at the forefront of digital revolution in terms of a mobile offering. “It might not be long before others try to imitate this, however we take that as a compliment, “he adds with a chuckle.
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Expansion of VMMEA
Regarding the brand’s growth and expansion strategy in the region, Gow sees a great growth potential in the region. “We really have just started to scratch the surface with Virgin Mobile in the region. We have two brands- FRiENDi and Virgin Mobile. Having two brands gives access to different segments, meaning bigger potential.” At the moment, Virgin Mobile has approximately 10% market share in Oman (according to Alan Gow), which is probably the highest market share of any MVNO in the world. In Saudi Arabia, the brand has around 5% market share, i.e. around 2.6-2.7 million customers, most of which were acquired in a two-year period implying rapid growth. “That’s great to press the pedal to the floor on Virgin Mobile as then we can roll into other markets, and fill in the GCC footprint. As soon as VM UAE goes fully live, we will have UAE, Saudi and Oman on our regional footprint,” Gow says.
The fact that such an edgy brand managed to break ground in a market like Saudi Arabia, which is usually considered to be conservative, is quite a success for Virgin in the region. “I think the initial reaction in the UAE is the most recent evidence. It’s been quite phenomenal. We have had really incredible levels of pre-registration interest and in beta-testing, we are converting some of those into real customers. Stay tuned for the story to unfold,”Gow says.
In addition, Gow has plans to expand Virgin Mobile to Maghreb and develop its base in South Africa. “VM has existed in South Africa for a while however it’s still relatively small there. One of the main things that Virgin wants me to do is to transform that business. South Africa is a country with an approximate population around 50 million. I don’t see any reason why we can’t be as successful as we could be in Saudi or other markets.”
In the meanwhile, the brand will continuously be working to extend product portfolio, and enable digital transformation. Another interesting development for the brand is a potential IPO around late 2018 or 2019. Gow says: “We have lots of investors- so we are looking for exits for some of those investors. The most likely route to that will be an IPO in the next one to two years. Bear in mind, we need to demonstrate continued growth curve which we are already on. If things continue the way we have planned, IPO will become very feasible.”
Interestingly, Gow also happens to be an architect of the company’s ground-breaking economic model as a mobile virtual network operator (MVNO). Elaborating further on the model, he says: “Personally, the excitement of creating a new model in the market is tremendous, especially when it’s so successful. It has a number of benefits. When we started, pre-paid customers were treated as second class in most of the markets, however not to us. MVNO model placed the emphasis on this segment properly. That’s the main reason for the success of the MVNO model.”
Since the invention of the MVNO model 17 years ago, it has since then been rolled out and evolved variously across the world. “There are around 200 million MVNO customers. Virgin Mobile is the largest multi-country MVNO and has 10% of that. We got a formula that works,” Gow says. He is quick to add that a winning formula doesn’t imply the brand stops evolving. “The market’s been getting tougher and we have evolved that from prepaid into prepaid-post-paid hybrid to converged products and digital products. Having invented the model, we are keeping ahead even as the model evolves.”
Virgin hasn’t been one to shy away from new services. Gow says how Virgin Media was a great success in the UK. “However, the new services we launch depends a lot on what’s available in each market,” he says. “So, we might start to offer broadband services as well in markets like South Africa. It’s not so easy to do in some other markets though.”
The other focus area for the brand will be around getting more content out there. “Everyone tends to think Virgin is content rich, however, content tends to be market-specific. So, we might have massive content in the UK, but licensing that for a new market will be difficult. I am pretty focussed on OTT content as are other telcos,” he adds. Virgin Mobile MEA might consider partnering with some OTT content providers in the coming months too.
As the telco markets continue to get saturated, Gow agrees that growth will be very hard to come by for most telcos. Virgin Mobile targets its revenue growth to come from increased subscriptions. To boost revenues, the brand has put in place a very advanced data analytics platform in order to target customers with just the right offers to encourage more spending. “Other telcos are doing that too. However, the amount of data they need to skim through is enormous. And we are especially good at this stuff,” he says.
While the initial bouts of excitement around VM UAE continue, Gow hints at more exciting developments from the Virgin stable in the coming weeks. The impact of the brand on the UAE market will be definitely worth the wait.