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Thursday, November 11, 1999 Published at 07:59 GMT

Business: The Company File

Virgin launches mobile phones

Mobile phone use is growing rapidly

Richard Branson has launched his latest venture - selling mobile phones.

The colourful entrepreneur has existing operations stretching from cola to mortgages to running the trains between London and Liverpool.

Unveiling details of the phone venture, he claimed that Virgin mobiles would save customers £200 a year.

The BBC's Sarah Boxhall: "Vrigin claim they will offer the cheapest service"
He said the company aimed to have one million customers within the next fifteen months.

It is a joint venture with the UK's smallest mobile phone operator, One-2-One, which was recently bought by Germany's Deutsche Telekom.

Mobile phone ownership in the UK has been growing rapidly, with more than 20m people expected to be signed up to one of the four main networks.

Richard Branson: "I think it's perfect Virgin territory"
But that popularity has come despite complaints by customers that the prices charged were too complicated.

The launch last autumn of the pay-as-you-go phones - where a customer buys a voucher for calls and has no monthly subscription - proved a bigger than expected hit as customers reacted to the simplicity and manageable charging system.

Opening up networks

Mr Branson, who likes to portray himself as being on the side of the consumer in taking on outdated or overpriced industries, described mobile phones as an example of "rip-off Britain".

He said: "I think this is perfect Virgin territory. It's an industry which over-complicates things and charges too much."

Virgin says it will not subsidise the cost of handsets, but will also not charge any monthly subscription, merely the cost of the calls.

The phones - costing from £90 upwards - will have a red button on them which will allow users to listen to a radio station and to link up with other Virgin operations.

Calls will cost 15p for the first ten minutes, 10p for the next ten minutes and 5p for calls after that.

It is the first company to enter the industry outside of the four which own the mobile phone networks in the UK.

Industry regulators have been aiming to open up the networks to other operators to try and drive down prices.

Meanwhile, the government will soon begin auctioning licences for the next generation of mobile phones, which will allow customers access to the internet via their handsets.

There will be five mobile phone licences issued by the government. Mr Branson said he would be examining the possibility of becoming the fifth operator.

The phones will be sold direct and from Virgin's network of high street stores.

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