Optus to merge Virgin Mobile Australia and SIMplus

6 Feb 2006

Australian telco SingTel Optus has announced plans to merge two of its wholly owned cellular businesses, Virgin Mobile Australia (VMA) and SIMplus Mobile. It is believed that the merged company will operate under the Virgin Mobile brand, though Optus says both companies will remain as separate legal entities. The merger is already underway. ‘VMA has one of the strongest pre-paid offerings in the market and SIMplus has strengths in the post-paid market through varied sales channels,’ Optus Chief Executive Paul O’Sullivan said. ‘Synergies between the two companies are strong and in the highly competitive mobile market, combining these operations makes good business sense.’

Last month Optus acquired the 74.15% of VMA it did not already own from the Virgin Group. Optus paid AUD30 million (USD22.5 million) to up its stake in the mobile virtual network operator (MVNO) to 100%. The deal included a 15-year agreement for ongoing use of the Virgin Mobile brand in Australia, extending to other telecoms products. Optus is also expected to assume USD2.28 million of debt owed by VMA to Virgin Group. Virgin Mobile Australia launched in October 2000 and operates under a wholesale agreement using Optus’ network. It claims to have more than 600,000 customers and posted sales of AUD189 million for full year 2004. SIMplus resells Optus Mobile products to approximately 180,000 customers, recruited through its partner network of more than 150 dealers.

Australia, Optus Mobile