Saudi Arabia-based Sanabil Investments has acquired a minority stake in Virgin Mobile Saudi Arabia, which is part-owned by British business mogul Richard Branson’s Virgin Group.
Virgin did not disclose the value of the deal but indicated that the investment will be used to grow its regional operations.
Sanabil Investments- abbreviated for Saudi Arabian Investment Company – is a closed joint stock firm owned by Public Investment Fund, the investment arm of the Saudi government.
Virgin Mobile Middle East and Africa was launched in 2014 after Saudi Arabia’s telecoms regulator ordered its three mobile operators to each host a mobile virtual network operator.
Operating as a MVNO, VMMEA’s core business activity is to provide mobile telecommunication services to consumers. The company does this under two brands – the youth-focused Virgin Mobile, and Friendi mobile, targeted at expat workers.
Following the launch, VMMEA has charted an ambitious growth strategy and plans to launch in more countries. The company is targeting a regional customer base of over 10 million subscribers within next five years.
Saudi Arabia is forecast to be group’s biggest market in the region.
Apart from the kingdom, VMMEA currently operates in South Africa, Oman, Malaysia and Jordan.
The Middle East is a thriving market for telecom operators with a growing subscriber base.
According to a recent report by telecommunications firm Ericsson, the Middle East and North East Africa region had about 680 million mobile subscriptions by the end of 2014. Subscribers are forecast to grow at a compound annual growth rate of 6 per cent to 2020, reaching 970 million.
As of 2014, about 17 per cent of all mobile subscriptions come from smartphones. But with the advent of cheaper devices and increasing mobile broadband rollouts smartphone subscriptions are predicted to rise.
Of the 970 million mobile subscriptions forecast by 2020, 40 per cent will come from smartphone users, the report said.