JSE-listed Huge Group has reached a deal to acquire the remaining assets belonging to the former Virgin Mobile South Africa, now known as Tethys Mobile.
Virgin Mobile, which was South Africa’s first mobile virtual network operator, or MVNO, has been in business rescue since September 2020 after running into trouble. It no longer has any retail clients.
Huge Group said in a statement on Wednesday that it has concluded a series of transactions with the shareholders and creditors of Tethys Mobile to secure the acquisition.
The name Tethys will be changed to Huge Digital Enablement once the deal has been concluded. A due diligence by Huge of Tethys must, however, still take place before the transaction is ratified.
“Huge Group’s rationale for acquiring Tethys is the indirect acquisition of its software and technology platform, and the intellectual property related to this software and technology platform,” the company said in Wednesday’s statement.
“The intention is to leverage the world-class technology built into this software and technology platform and the operational capabilities that exist in support of it. Over the past 16 years, Tethys has created a sophisticated technical and operational capability linked to this software and technology that will allow the company to provide a platform-as-a-service, or PaaS, to organisations that aspire to provide MVNO services.”
In simple terms, Huge plans to offer a technical platform to prospective MVNOs in South Africa, the number of which is growing fast, with banks, retailers and other consumer-facing organisations using mobile services as a way of creating stickiness among their clients.
Huge Group explained that the assets it’s acquiring include a multi-tenant CRM platform, billing system, and an online charging system that provides enhanced billing, customer and subscriber management, product, tariff, and real-time rating capabilities.
Creditors who supported Tethys during the business rescue process will be paid in full. This includes Tethys/Virgin Mobile subscribers who were due refunds after their access to network services was terminated in September 2021 by network partner Cell C.
Huge Group will acquire Cell C’s claims against Tethys as well as the claims of various pre-commencement creditors. Huge CEO James Herbst declined to quantify the figure when asked for comment by TechCentral, citing confidentiality.
Zak van de Merwe, who has led Virgin Mobile and Tethys through the business rescue process, will remain on as CEO of the renamed Huge Digital Enablement following the conclusion of the deal.
Van de Merwe said the Tethys and Huge teams have identified an “unbelievable opportunity to provide a platform-as-a-service to many aspiring and soon-to-be-established branded MVNOs”.
“Huge Group’s involvement comes at the perfect time … when … consumer brands are aggressively embracing the digital mobile channel as a primary element of their customer experience,” he said.
Huge Group has no intention of reviving the Virgin Mobile brand or providing mobile services to end users itself. “Our interest in the company is its software and technology platform. Huge Digital Enablement will offer its software and technology platform to MVNOs with the support of the mobile network operators,” said Herbst. TechCentral