Updated May 16, 2008

   International conglomerate Virgin Group owned by the British billionaire Richard Branson has launched the first project in Russia. In 32 regions of Russia has been already implemented the Virgin Connect brand network of wireless broadband access on WiMAX technology basis. In the nearest five years the company intends to occupy 10% of broadband access market the volume of which attains $5,5 billion by 2013.

   Virgin Group (VG) has started the own network of wireless broadband access on WiMAX technology basis in 32 regions of Russia. VG will develop its business on Trivon provider basis under Virgin Connect (VC) brand. This company will render such services as telecommunications, data transfer and the Internet access in corporate and mass segments. The company WiMAX-network operates in frequency range 5,7-5,9 GHz. "We’ve also gained the permit of the State Committee for Radio Frequency Allocation for frequency range 5,9-6,4 GHzGgts in some regions, and we finish the process of frequency assignments receipt", says director for Trivon Group product promotion Yulia Shalneva. According to her, the company plans to expand the area of geographical network coverage, by means of provider companies’ purchase as well. However, Mrs. Shalneva does not specify what regions in particular Trivon is going to enter and with whom among the market participants it negotiates about a purchase. But according to Enforta company director for marketing Oleg Taynov, now Trivon holds talks with some regional players, with Kostoma provider RDN-Telecom in particular.

   Virgin Group is founded by Richard Branson in 1970. The company is considered the most well-known umbrella brand in the world. Virgin companies (more than 200) operate in 29 countries in such areas as tourism, air transportations, entertainment industry, media, telecommunications and etc. The company numbers more than 50 000 employees. According to 2007 results Virgin Group turnover exceeded $23 billion.

   According to VG founder Richard Branson, in the nearest five years VC plans to occupy 10% of the Russian broadband access market. By the estimations of iKS-Consulting analyst Konstantin Ankilov, by 2013 Russia’s broadband access market totals $5,5 billion (according to 2007 results – $1,8 billion). Neither Trivon, nor VG disclose the project investments. However, as it became known the core project investors are VG and two private investments funds: Delta Partners and Eurasia Capital Management (ECM). Both funds refused to tell what stakes in Trivon they own. All three companies own "significant stock holdings in Trivon", other stocks are possessed by some "large private investors and company management" as it was said in press-release

   Delta Partners private investments fund (headquarters located in Dubai; manages $75 million capital) invests into the telecommunication and media projects in the CIS, Near East and African countries. ECM is Eurasia Capital Group branch with headquarters in Singapore and it manages $200 million investments. The company operates at the European region markets (Russia, Ukraine, Kazakhstan, Mongolia) and invests mainly in such areas as telecommunication, banking, oil and gas.

   S-Group Capital Management partner Ilya Dubinskiy marks that Virgin is fully able to occupy 10% of broadband access market within five years, but in case the company is ready to invest significant means. "Virgin could spend hundreds of millions dollars to purchase and construct networks in 32 regions. This is without operating expenses for trunk channels leasing. Despite many investors believe in WiMAX technology now, it takes a long time before it pays out". According to Mr. Ankilov estimations, investments for WiMAX network promotion in one city total from $0,5 million "to several million dollars".

   Investments for VC brand promotion by means of main TV channels – television and internet – can total around $6-7 million, as experts counted up. "Russia never had Virgin ads, although almost all who buy the licensed disks know the products of the record company selling disks under the same brand name", says InterBrand director general Maxim Parphenchikov. "But it can hardly now bring some bonuses from the viewpoint of means saving to promote the brand, as such users’ community is very narrow. By my calculations, the company has to spend $1-1,5 millions to adjust Virgin brand-platform for the Russian market and prepare the communication strategy".