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Virgin Mobile tipped to buy Danish outfit

Industry shake-up mulled

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Virgin Mobile is sniffing around Danish no frills, low cost mobile phone outfit, CBB Mobil, according to Reuters.

News of Virgin Mobile's interest in buying CBB coincides with last week's amicable resolution of a bitter row between Virgin Mobile and its 50:50 joint venture partner T-Mobile.

As part of the healing process, Virgin Mobile is also going to buy-out T-Mobile's share in the JV, paving the way for a possible floatation perhaps later this year.

And if Virgin succeeds in buying CBB it could lead to a massive shake-up of the mobile industry in the UK.

According analyst firm Strand Consult, operators such as CBB have helped revolutionise the Danish mobile market. Employing low-cost, no frills business models, these operators have forced down the cost of using a mobile phone.

In the last six months, for example, Strand reports that the price of a mobile minute has dropped from €0.17 to €0.09, while the cost of an SMS has fallen from €0.07 to €0.03.

Now, Strand is seeing the business models employed by this new breed of Danish discount operator being exported to other European countries. Virgin's interest, it seems, is to acquire that expertise and bring it to the UK.

As one senior industry source put it: "The mobile industry would be turned upside down in much the same way that the no-frill airlines have revolutionised the airline industry.

No one from Virgin Mobile was available for comment at the time of writing. ®

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