Optus has confirmed that it will shut down Virgin Mobile, a brand the telco has co-owned for 18 years.
Over the next two years, Optus will begin phasing out the brand and Virgin customers will be moved to Optus.
The closure of Virgin Mobile means that up to 200 jobs will be lost across 36 stores nationwide. It is unclear whether or not all employees will move over to Optus, but a spokesperson did say that Optus was looking at redeployment.
“For Virgin Mobile employees, our policy is always to talk to those who may be impacted by these changes first,” an Optus spokesperson said on Wednesday.
Virgin customers will be dealt with similarly: “Virgin Mobile customers can continue to use their service in the same way they always have. We will be contacting them in the coming days to let them know more about the changes and their future options,” another statement read.
Virgin Mobile was established as a joint venture between Optus and Virgin Mobile UK in 2000. Optus was purchased by Singapore Telecommunications (Singtel) in 2001 and the telco giant made moves to acquire its partner’s stake in Virgin AU in 2006 for $30 million.
This was a 15-year deal that allowed full autonomy of the brand from Optus, including the potential for fixed line internet.
Why is Virgin Mobile shutting down?
The writing may have been on the wall for quite some time. In December 2017, Virgin Mobile ceased offering prepaid plans entirely, instead offering a simpler array of postpaid SIM only and phone plans.
Currently, it is one of the few Mobile Virtual Network Operators (MVNOs) to offer premium phone plans, such as the iPhone X. It is generally one of the cheapest to do so, but faces tough competition from Vodafone and Telstra, which tend to offer big data bonuses, and other perks.
Virgin Mobile also – even though it is a subsidiary – competes with Optus, making for a crowded phone segment.
As for other MVNOs, there are more than 30 out there, including more than 10 on the Optus network, making it hard for Virgin Mobile to stand out.
Despite this, Virgin Mobile took out Canstar Blue’s customer satisfaction award for Mobile Broadband in May 2018. It scored five stars for overall customer satisfaction and in key areas such as value for money, customer service and network performance.