Upwardly Mobile? The Challenges for Ireland

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Upwardly Mobile?The Challenges for Irelands
Mobile Sector Solutions for Virtual Mobile
Operators 19th May 2003
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Virgin Mobile Why did it happen?

• Virgin saw gap in market for consumer champion
  and youthful brand
• Little perceived difference between networks
  product, brand and user imagery, except Orange
• General sense of lack of innovation, high costs,
  loaded with catches and stings
• Opportunity for white knight trusted brand

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Virgin Mobile UK - Overview

• Launched in UK in November 1999
• Joint-venture between T-Mobile and Virgin
• 100m shareholder investment, 115 debt financing
  in October 2000
• UKs first MVNO, now worlds largest
• First consumer brand move into UK mobile industry

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Virgin brand ethos

• Innovation
• Challenge
• Quality
• Value for Money
• Fun!

in the way we provide services to customers
in the way we work together in the way we work
with our business partners
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Virgin Mobile created a proposition with
personality

• Consumer focus targeting 16-34 yr olds
• One tariff, no peak rates, more you use the
  cheaper it gets
• Pay any way you like pre-pay (with non-expiring
  vouchers) or pay monthly
• No contracts to sign were easy-going!
• VirginXtras (VAS) on every phone, voice portal
• Friendly and easy to access Customer Service

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Virgin Mobile Economic Model is Key to Success

• MVNO model has low capital intensity
• Outsource partner management
• Brand marketing efficiency
• Low operating cost base designed for consumer
  market economics
• Prepay proposition highly cash efficient

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Economic Model It Works!

• From growing start-up company in 2001 to
  strong bottom line results in 2003
• EBITDA achieved alongside fast customer growth

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Strong Customer Growth and Market Share
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Best in class ARPU
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2002 Performance Highlights

• 938k net additions, subscriber base up 65 to
  2.38m
• Revenue increased 65 to 288m
• EBITDA of 16m, 37 better than plan
• Over 90 of customers woulddefinitely/probably
  recommend Virgin Mobileto friends

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2003 The business model comes of age
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Virgin Mobile The Outlook Making money from
higher bandwidth

• High potential of our customer base - culturally
  open to using new services
• person-to-person communication (voice, text,
  chat, picture messaging, etc)
• Sport, fun, sex, personalisation
• A brand that already provides consumers with
  entertainment, music, travel, and banking
• Business model based on what we do best
• Exciting service experience its show business

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Virgin Mobile The Outlook UK and Beyond

• UK business at the tipping point
• Concept proven
• Growth accelerating despite slowing market
• Financial strength to develop further
• Becoming established outside European arena
• US
• Australia
• Virgin Mobile is the hot property in Europe
• Courted by numerous players
• Market share opportunity for incumbents
• VM not bound by geography and licenses

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Thank You
Damian BlackburnHead of Commercial
Development Damian.Blackburn_at_Virginmobile.com