JupiterResearch: Welcoming Virgin Mobile in France

Thomas Husson posts at the Jupiter Analyst Weblogs about the launch of Virgin Mobile in France. Hussuon writes that "the good news is that investors are still entering the French market ! After the UK (with over 4.3M subscribers, it is by far the most successful MVNO worldwide), US, Canada (launched in 2005) and Australia, Virgin Mobile is entering the French market. First launch in a non-English country, except Singapore which was a disaster."

Husson says that "so far, France was not really MVNO-friendly: up to 3 months for Mobile Number Portability, more contracts than prepay users and wholesale tariffs far from interesting ! But the market is opening (starting from almost zero) and competition will increase with Tele2, NRJ and some license agreements (M6, Universal Music, TF1 to be launched)."

He notes that "Virgin mobile has a lot of ambitions for France : 1M subscribers in 3 years." Husson asks whether it will be able to replicate its UK success and looks at the significant key success factors:

• a marketing and advertising know-how. The offer is interesting with unlimited SMS. However, it is restricted to the first 35K subscribers (Orange, the host MNO, prefers to be cautious...for its own network). -
• a strong brand even though its perception is very different here than in the UK
• a solid distribution network. Virgin Mobile is a JV with the Phone House, one of the main independent phone retailers. It has its own stores and distribution agreements with a bank (as NRJ with Credit Mutuel, interesting from a cost of acquisition point of view) and the usual suspects in France (Auchan, Cora,...)

Husson concludes that:

It could also in the mid-term benefit form VirginMega, the digital platform, already selling ringtones and music. No doubt, the acquisition of Virgin Mobile by NTL today will also be an asset even though multi-play offerings are more likely to emerge in the UK with an increased competition with BSkyB. So, the success of Virgin Mobile in France will be a good metric for the success of MVNOs in this country.