Canada’s leading Mobile Virtual Network Operator, Virgin Mobile Canada,
announced earlier this week that it hopes to gain a bigger share of the cell
phone market by expanding beyond its traditional prepaid wireless niche, and
into postpaid contract services.
“We didn’t want to be all things to everyone from the world ‘go,’” explained Sir
Richard Branson, the British billionaire who founded Virgin Mobile’s parent
company, the Virgin Group. “We’ve proven conclusively that we could come up with
the right offerings and expand into a bigger piece of the pie.”
Since it entered the Canadian market three years ago, Virgin Mobile has achieved
a customer base of around 500,000 users, making it the #1 player in the
country’s small but lucrative prepaid wireless market.
“The problem with prepaid is that we built a great brand, but it’s only 22% of
the market,” Branson said. “By going postpaid, we’ve got the whole Canadian
audience … and we’ve got to be ahead of the game.”
Some analysts have expressed doubt over Virgin’s postpaid plans, however, noting
that the company’s youthfriendly image is more compatible with prepaid
“It’s pretty hard for kids to pass credit checks,” said SeaBoard Group
telecommunications analyst, Amit Kaminer.
Kaminer also said that Virgin Mobile’s status as an MVNO, and its reliance on
Bell Mobility’s network facilities, could influence the cost of its services,
and make it difficult to compete directly with Canada’s three leading carriers –
Bell, Telus, and Rogers – all of which own and operate their own networks across
Virgin Mobile Canada’s CEO, Andrew Black, declined to offer details about the
company’s forthcoming postpaid services for “competitive reasons,” but said that
the “simpler, more transparent” service would be unveiled early next year.