IFC Invests in Virgin Mobile to Expand Affordable Access to Broadband Mobile Services in Central and Eastern Europe
IFC, a member of the World Bank Group, together with the European Bank for Reconstruction and Development (EBRD), Delta Partners Emerging Markets TMT Growth Fund II, and CEE Mobile Capital LLC (spearheaded by Dick Kiphart of KGC Capital LLC), will provide €40 million of growth capital to Virgin Mobile Central and Eastern Europe (VMCEE) to boost access to affordable broadband mobile services for youth and lower-income groups in the region.
At a time when investment activity in the region is declining, the loan demonstrates the success of innovative business models that leverage existing infrastructure. The deal with VMCEE, an early stage mobile virtual network operator (MVNO), is expected to catalyze competition and innovation and stimulate economic growth by expanding affordable access to voice and broadband services.
“Virgin Mobile is one of the most successful MVNO brands globally, with an excellent track record of improving services for customers and generating returns for shareholders,” said Alan Gow, CEO VMCEE and previously co-founder and managing director of Virgin Mobile U.K. “We are excited by the growth opportunities in Poland, Turkey, and across the CEE region. Now, with the support of our new shareholders, we look forward to accelerating our growth in Poland and building the region’s leading MVNO operation.”
Tomasz Telma, IFC Director for Europe and Central Asia, said: “IFC’s global partnership with Virgin Mobile allows us to support their efforts to broaden their reach and introduce innovative services and knowhow to the region. This project provides much-needed, affordable high-quality access to mobile services, introduces new technologies, creates employment opportunities, and promotes competition in the sector.”
Izzet Guney, EBRD’s Director of Information Communications and Technology, noted: “We are pleased to champion virtual mobile network operations by supporting Virgin Mobile’s expansion in the CEE market. The MVNO business model is at very early stages of development in the region and we are pleased to see our financing bringing along such strong partners as CEE Mobile, Delta and IFC. This is a landmark investment in the sector, bringing innovation and strengthening competition among mobile market operators.”
IFC supports economic development in Europe and Central Asia by expanding access to finance, improving infrastructure, and tackling climate change through a mix of investments and advisory services. With continued eurozone volatility, IFC also supports diversification and promotes access to basic goods and services to reduce poverty and boost shared prosperity. IFC invested a record total of nearly $4.7 billion in 117 projects across ECA countries in fiscal year 2014.
About Virgin Mobile Central and Eastern Europe
Virgin Mobile Central and Eastern Europe runs the Virgin Mobile businesses across the CEE region. It aims to become the leading MVNO in this high growth-potential area; targeting a potential market of over 275 million mobile consumers. To know more, please e-mail firstname.lastname@example.org
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In FY14, we provided more than $22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development. For more information, visit www.ifc.org.
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