Competition is a good thing for consumers of course, but maybe it’s good for the companies in the market place too. It appears that the extra dynamism that competition brings to an industry increases customers interest, and ultimately leads to a bigger industry altogether. Take mobile phones in the UK, as you have no doubt noticed, there’s a lot of competition. In parallel with this the market has grown - and we are now approaching 100% penetration for mobile phones in the UK, as is the case in Italy, but in France, with it has just three major mobile network players- Orange, the Vivendi/Vodafone-owned SFR network, and Bouygues Telecom there’s just 70% penetration.
The UK, of course has got its virtual mobile phone companies, the likes of Tesco, Stelios’s EasyGroup and Virgin. It means less profit for the main network providers, T-Mobile, for example supply Virgin, because they have to share the revenue from the venture with the virtual mobile phone company, but as it seems to result in a bigger industry and keeps the regulator happy to boot, they are not complaining too loudly.
I’s thought that French regulators want to see more competition. Enter two of Britain’s most successful entrepreneurs. Sir Richard Branson, and Charles Dunstone of Carphone Warehouse are clubbing together to launch the Virgin Mobile Phone network in France, to be distributed across Carphone’s 300 French stores. The service will use the Orange network.
Apparently, the Virgin name is almost as well known in France as it is in the UK, so it already has a strong brand on which to build. It’s not quite so well known in other European countries, but even so it’s thought that Virgin Mobile will be expanding across the continent now.
The company is already enjoying success in the US in a joint venture with Sprint and in Australia.
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