Virgin mobile cellular phone

SINGAPORE, May 19 Kyodo

British tycoon Richard Branson's Virgin Group will announce a venture targeted at Japan's mobile phone market in two to three months, Branson said at press conference in Singapore on Friday.

Branson was speaking after signing a memorandum of understanding with Singapore Telecommunications Ltd.'s mobile-phone subsidiary SingTel Mobile to establish US$1 billion venture for a piece of Asia's mobile phone market, excluding Japan.

He said Virgin is also actively negotiating for a partner in Japan.

"We will be announcing in the next two to three months a deal in Japan similar to what we are doing here today," Branson said.

His Virgin Group started into Britain's cell-phone market in November 1999, and has attracted 250,000 subscribers. It struck a deal in March to enter Australia's market later this year.

The partnership between Virgin Management Ltd. and SingTel Mobile is seen as a morale booster for the cash-rich SingTel after it was rejected in recent bids for Hong Kong's Cable and Wireless HKT and Malaysia's telecom-related Time Engineering.

Singapore Airlines owns 49% of Virgin Atlantic, the holding company for Virgin Atlantic Airways, which it bought in March. Both Singapore Airlines and SingTel are majority-owned by the Singapore government.

Under the terms of Friday's understanding with SingTel, the two companies will negotiate and finalize definite agreements by August this year in which each side will have a 50% share in a new company, Virgin Mobile (Asia) Pte. Ltd. that will have a paid-up capital of US$1 billion and will be headquartered in Singapore.

The venture is expected to launch services in the first quarter of next year with initial targets being Singapore, Hong Kong and South Korea.

"These are three of the most developed economies in Asia, where demand for cellular services remains high," a joint statement issued by the two sides said.

The new company will function as a regional virtual mobile network operator, buying cellular air-time on a wholesale basis from a leading local cellular service provider in each market, including SingTel Mobile in Singapore.