Proximus boosts multi-brand strategy via €130m MVNO deal

Proximus has agreed to spend €130 million to acquire virtual player Mobile Vikings, a move that will further its strategy of targeting various market segments with multiple brands.

Mary Lennighan

December 14, 2020

3 Min Read

Proximus has agreed to spend €130 million to acquire virtual player Mobile Vikings, a move that will further its strategy of targeting various market segments with multiple brands.

The Belgian incumbent will gain around 335,000 customers as a result of the deal, which is slated to close next year, subject to the approval of the the Belgian Competition Authority.

Presuming the deal gets the green light – and it will be closely examined by the regulator – Proximus will add two new sub-brands to its stable: Mobile Vikings and sister MVNO operation JIM Mobile. Parent company DPG Media acquired JIM Mobile in 2015 and grouped it together with Mobile Vikings, having founded the latter as long ago as 2007.

The two brands and their price plans are “particularly attractive” to young and data-savvy customers, DPG Media said, on announcing the Proximus deal.

“Mobile Vikings will continue to operate as a separate entity within the Proximus Group, with clear positioning and its own strong identity,” a statement from DPG Media read. “Proximus has made a clear decision to ensure continuity in the DNA of the  Mobile Vikings brand, which will continue to offer its products and services under the same conditions and the same name.”

Proximus confirmed that that is indeed the case, noting that Mobile Vikings and its 80 employees will operate as a separate entity within the group, following the model of two other group subsidiaries: Scarlet and Tango. Scarlet offers a no frills alternative to the main Proximus brand in Belgium, while Tango is an alternative to Proximus’ Telindus brand in Luxembourg.

“This acquisition opens up a complementary market segment to Proximus’ current core target group (Scarlet and Proximus), optimizing its multi-brand positioning in the residential market,” Proximus said, in its own statement.

“My first priority will be to preserve and further develop the identity and market positioning of Mobile Vikings, in order to ensure that this acquisition perfectly complements our existing brand portfolio. All of them are different, but very relevant in their respective segments,” added Proximus Group CEO Guillaume Boutin.

The telco does not split out Scarlet’s financial and operational performance, but in its third-quarter report noted that a 2.3% year-on-year increase in consumer revenue to €672 million stemmed mainly from customer growth across Internet, TV and mobile, and from a Scarlet promotional campaign that proved popular.

DPG Media forecasts that Mobile Vikings will generate just north of €50 million in revenues this year with an EBITDA of €15 million. Proximus said it expects to generate unquantified synergies from the deal, both at the network level and “from a commercial perspective driven by convergence.” It expects to start realising those synergies from 2022.

Proximus noted that the acquisition is in line with its Inspire2022 strategy, unveiled earlier this year, a key tenet of which is to return to profitable growth in 2022. The telco trotted the usual lines about network leadership, partnerships, customer satisfaction and net promoter score, and opex reductions through increased automation and the simplification of internal processes; it aims to operate like a digital native company, including becoming entirely legacy-free in terms of IT by 2025. We will have to wait a while longer to judge how it performs against those targets, but for now, the acquisition of Vikings Mobile is a step in the right direction in terms of growth at its consumer business.

About the Author(s)

Mary Lennighan

Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.

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