Branson jumps on the mobile bandwagon

BLOND BILLIONAIRE Richard Branson returned to the spotlight yesterday with the launch of Virgin Mobile, a 50:50 joint venture with One2One that is promising customers cheaper calls and simpler pricing with no-line rental fees.

Unlike the four existing mobile operators, Virgin Mobile won't subsidise handset prices, a practice that Mr Branson said leads to consumers being overcharged. "It's Rip-Off Britain at work again, with companies forcing consumers to pay more just because they can get it," Mr Branson said.

Noting the dizzying complexity of mobile tariffs available, he added: "That's obviously plain silly and something has to change."

Virgin Mobile, which aims to have a million customers by the end of next year, will sell its handsets in over 300 Virgin and Our Price stores as well as through the Internet and its cosmetics direct sales force. The seven phone models available will range from pounds 69.99 to pounds 379.99 with a further pounds 12.50 starter that includes pounds 10 of air time. Calls to UK fixed line phones and Virgin Mobile numbers will be charged at 15p per minutes for the first 10 minutes, 10p a minute for the next 10 minutes and 5p per minute for the rest of the day.

Calls to other mobile networks will cost 35p per minute due, Mr Branson said, to the higher tariffs charged by Virgin's mobile competitors. One2One will carry Virgin Mobile calls, but the service will carry the Virgin brand and Virgin will be responsible for customer billing and service.

Analysts expect the partners to invest pounds 100m over two years, including an immediate pounds 20m advertising blitz to exploit expected strong demand in the run up to Christmas.

The burgeoning mobile market led NTL, the cable and television transmission system operator, to declare yesterday that it is seeking a deal to buy capacity through a partnership with an existing network operator in the third generation licence auction due to take place in March.

"It's not an issue of financing," said Leigh Wood, NTL's chief operating officer. "It's an issue for us of being a complete communications company." Until now, industry observers have expected NTL to bid aggressively for one of the five licences to be offered, though Ms Wood said that remained an option for the company.