The entry of Virgin Mobile plc (LSE: VMOB) into Israel's about to be established Mobile Virtual Network Operator (MVNO) market through its partnership with Alon Israel Oil Corporation controlled by president and CEO David Weissman will bring huge added value to Israel's cellular phone sector.
Virgin is a major international brand, which encompasses an airline, record label largely thanks to its owner Sir Richard Branson, a colorful and extraordinary personality who is renowned worldwide. Virgin succeeded as an MVNO in the UK while most of the other British operators have collapsed in recent years.
As part of the joint venture between Branson and Weissman, Virgin will benefit from royalties for the use of its brand name.
Market opinion is divided on whether the power of Virgin's brand name will indeed be a magnet in Israel's cellular market. However, the potential combination of Virgin and Alon/Blue Square is a fascinating one. Alon's Blue Square Mega retail supermarket chain brings huge marketing power to the joint venture, while together with Virgin's international reputation and know-how, the new company could succeed in winning a reasonable market share.
Interviews are currently being conducted for the new venture's CEO.
At the same time, all the budding ventures in Israel's MVNO market are still far from finalizing the form that they will take because they are all still waiting for the regulator's decision regarding user fees that will be paid by both new and existing players in this new sector.
Published by Globes, Israel business news - www.globes-online.com - on November 14, 2010
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