Virgin steps into broadband market

On May 15, a broadband access network using WiMAX technology, which provides high-speed connections over very long distances, started operating in 32 Russian regions under the Virgin Connect (VC) brand.

Virgin Group will work through access operator Trivon, providing telephone connection, data transmission and internet access to corporate and individual clients.

Set up in 1970, Virgin is probably the most famous umbrella brand in the world. More than 200 companies, employing more than 50,000 people in 29 countries, trade under the Virgin brand name. The group's 2007 turnover exceeded $23bn.

Branson said that in five years VC would control 10pc of Russia's broadband access market.

Konstantin Ankilov, an analyst at iKS, a consultancy specialising in the telecom market in Russia and the CIS, said the Russian broadband access market would amount to $5.5bn by 2013 (from $1.8bn in 2007).

The main investors in the VC project are Virgin Group, the Delta Partners and Eurasia Capital Management (ECM) investment funds. The three companies hold a substantial stake in Trivon.

Delta Partners is a combined management consultancy, private equity and corporate finance firm working in the telecoms, media and technology (TMT) markets in the economies of the CIS, the Middle East and Africa.

ECM is an affiliate of the Singapore-based Eurasia Capital Group, managing investments of up to $200m. The company operates in Eurasian markets (Russia, Ukraine, Kazakhstan and Mongolia), investing predominantly in telecommunications, oil and gas, and banking.

Ilya Dubinsky, a partner with S-Group Capital Management, set up by steel tycoon Alexei Mordashov for investment in tourism, said Virgin could capture 10pc of the Russian broadband market within just five years if it is ready to make major investments.

Experts have calculated that investment in the VC brand through the main media channels - television and the internet - will reach $6-$7m. -

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