Virgin gains approval to operate in Brazil

29 May 2014 | Kavit Majithia


Regulators in Brazil have approved Virgin Mobile Brasil’s plans to use Telefónica Brasil SA’s mobile network to stimulate competition in the market.

Virgin Mobile Latin America – which operates the Brazilian entity – signed a deal in January from Telefónica and has plans to begin operations in 2015.

According to Phil Wallace, co-founder and chairman of the Virgin unit, the company is targeting younger consumers in the 15-30 year old bracket that have pre-paid plans.

Virgin Mobile has built a strategy in the region that has yielded over a million subscribers. It began operations in Chile in 2012 and expanded to Colombia last year.

Its launch in Brazil comes at a time when the market is showing a downturn, following a recent boom. At one point Brazil – with a population of 200 million – had over 270 million mobile connections.

Tighter credit and an erosion of consumer confidence has led to revenue decreases, with market watchers predicting consolidation among the four operating mobile carriers.

Virgin Mobile said it is targeting up to 15% growth in mobile subscribers through MVNO agreements.