Virgin plans mobile revolution

By 2003, 65 per cent of Europeans will own a data-enabled mobile phone, according to analyst company Gartner. So, never one to miss an opportunity, Richard Branson wants to make sure most of those phones will have the Virgin logo on them.

In the first of this pair of interviews, Branson's number two, Virgin's brand strategy and corporate affairs director Will Whitehorn, talked exclusively about V.Shops, the firm's attempt to take its online businesses back to the high street. But this is only one of several schemes aimed at helping the company fulfil its internet ambitions.

Whitehorn is also planning to dominate the mobile world, or at least a significant chunk of it. While Vodafone, Orange, BT and One 2 One have spent billions of pounds on buying third-generation (3G) mobile network licences, Virgin has sat back smiling and plotting, hoping that the strength of its brand, combined with the experience gained from its existing internet businesses, will put it in a strong position. If you thought selling Virgin-branded mobile phones was just about grabbing a slice of those lucrative call charges, think again.

So with a wealth of experience to call on, Whitehorn has agreed to offer some useful advice to stressed IT directors who are trying to take their businesses online.

Having established several successful internet businesses, taken Virgin's bricks and mortar business online, and brought them all together as V.Shops, what next?
The decision was taken in 1997 to get into mobile. We looked at being a service provider, and realised that wasn't the way the business should go. We then began to look at a concept developed by analysts but which had never been tested anywhere: the virtual network operator [VNO]. We began negotiations with various mobile companies and signed a deal with One 2 One in March 1999. The Virgin mobile network was up and running in November 1999, and is half owned by One 2 One. We just pay on a 'per minute' basis for all calls made. I think it was the first in the world to be a true VNO.

Our ambition is to be the first global mobile brand. The one advantage we have is a name we can use around the world. Vodafone has lots of capital, but it lacks a global consumer brand. Eventually, you will have six or seven global mobile phone companies where customers pay a single rate anywhere in the world. We very much hope Virgin will be one of them.

But what's in it for your customers, and how does this fit in with all your other businesses?
It's all about using the infrastructure set up for the dotcom world but adapted to the mobile world so you have a seamless experience.

For example, I press a button on the phone to book a journey to where I want to go. I get on a Virgin train which takes me to London, then I go to the airport and get on the Virgin Atlantic plane, and use just my mobile phone as the ticket. That's one of the reasons Virgin is investing in having a national transport business in the UK. Our vision is that this will really come together in about 2004 or 2005, and we think that's realistic.

Clearly, Virgin has a cunning plan for its future. But you won't achieve that without serious credentials for delivering heavy-duty ecommerce applications. What is your credibility here?
In 1996, every train operator was given the opportunity to introduce an ecommerce-based reservation system and none of them wanted to - they thought it was a joke and would never catch on. We set up www.the-trainline.com, which is one of the most complex ecommerce projects ever taken on in the UK. It has to talk to three very old British Rail reservations systems, which all the train operating companies can access to change their fares and schedules. There are 2.5 billion permutations, so it's an incredibly complex function.

With all that accumulated experience you must be able to pass on a few useful lessons to IT directors?
The people who really have to think about the business issues of going online are not the IT directors - they should be thinking about the mechanics of how they put the infrastructure in place to allow it to be done. The people who should be thinking about these issues are the strategists and marketeers. What happens so often in business is that the poor IT people get blamed for the fact that there wasn't enough foresight and thinking done in the first place.