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Virgin Mobile to close its doors in SA

The decision to shut shop comes after the business was placed into voluntary business rescue in November 2020.
Image: Andrew Harrer/Bloomberg

Virgin Mobile will soon be no more. South Africa’s first mobile virtual network operator, which was launched on Cell C’s network to much fanfare 15 years ago, will close its doors on 1 November.

The decision to shut up shop comes after the business was placed into voluntary business rescue in November 2020. The company told TechCentral at the time that it had become necessary to seek business rescue to restructure the company and stave off collapse.

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It’s now clear that it wasn’t possible to save Virgin Mobile South Africa, with the company announcing on its website that the decision was taken due to big shifts in the South African mobile market.

“In recent years, the market has changed considerably, and a combination of tough trading conditions, strong competition and the economic stress posed by Covid-19 means that it has been a challenging market for Virgin Mobile South Africa,” it said.

Since the business was placed into business rescue, the company’s management team – led by Zak van der Merwe – has worked with stakeholders to try to save it. it’s understood that Van der Merwe will leave the business.

Rebranded

“As part of the business’s new strategy, it will be completely rebranded as its new go-to-market strategy is implemented. As such, the business will cease trading as Virgin Mobile from 30 November 2021,” it said.

Existing Virgin Mobile customers will be contacted before the closure and given the option of switching to Telkom’s network or cancelling their contracts.

“Telkom is offering exclusive deals to anyone switching to its service from Virgin Mobile,” according to a notice on the Virgin Mobile website.

However, most customers still on Virgin Mobile are believed to be prepaid users.

Van der Merwe told TechCentral in November that the business had recently changed shareholding. He declined, however, to comment on specific questions about the shareholder make-up, or whether Richard Branson’s Virgin Group remained invested.

Duncan McLeod is Editor of TechCentral, on which this article was first published here.

© 2021 NewsCentral Media

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