Virgin in $1bn mobile deal

Branson's empire spans telecom, travel and music

Sir Richard Branson's Virgin Group is set to sign a $1bn deal with a Singapore Telecommunications' subsidiary, Sing Tel Mobile, to provide mobile and internet services in Asia.

The deal is the first step in Virgin's quest to establish itself as a global consumer mobile player and marks Virgin's continued expansion into Asia.

The two sides will take 50% stake in the new venture to be called Virgin Mobile Asia. Final talks are still taking place, and a definitive agreement will be signed by August.

Both sides will contribute an initial tranche of $50m each when the final deal is completed, but they have agreed to a total $1bn start-up investment.

Branching out in Asia

The new company, to be headquartered in Singapore, plans to launch services in the city state, Hong Kong and South Korea by the first quarter of 2001.

It hopes to garner 3 million subscribers in three years.

Sir Richard said Virgin wants to become the first global consumer brand in mobile telephone services in Asia, which lacks regional mobile brands.

The Virgin group has built itself into a lucrative brand name, spanning music, transport and consumer goods.

This is Sir Richard's second deal with a Singapore partner.

He recently sold a 49% stake in Virgin Atlantic to Singapore Airlines.

Japanese deal

"Following the expansion of Virgin Atlantic Airways into the Asian market, and our retailing successes in Japan, we decided at t the end of last year it was time to expand Virgin's presence in Asia," Sir Richard said.

"This ground-breaking agreement with Sing Tel Mobile is a very important step on that road, as there are no existing regional brands for mobile telephony in Asia. Indeed, there are no consumer brands in the mobile businesses, and it is our ambition to become the first," he said.

He said Virgin was in similar talks with a Japanese partner in what would be another £1bn deal, adding that an agreement would be finalised in a few months.

He also said the company was eyeing the Indian, Chinese, Thai and Malaysian mobile telephone markets.

Virgin Mobile plans to be a regional virtual mobile network operator, buying cellular airtime from each leading local cellular phone company in each market.

But it will manage its own marketing, billing and customer service.