Asia-Pacific a virtue for Virgin
By Andrew Dembina

HONG KONG - While those pondering globalization or the phenomenon of multinational companies' reach in Asia may find US fast-food chains or high-tech firms first spring to mind, there is one UK business group that, with all its diversifications, has fingers in more pies than just about anyone else.

While Virgin Group is hardly a quiet player - how could it be, with a founding director as extroverted as Sir Richard Branson? - its regularly morphing portfolio of products and services aimed squarely at the Asian market, including media, retail, mobile telecommunications and airlines, is substantial indeed.

Virgin Radio
Ever striving to project itself as a young-at-heart company - though Branson is now 55 - in Thailand and India Virgin's 



presence has become constant since it branched into
"hit music" radio stations there, as it did briefly in China. Virgin Radio Asia is a member of Virgin Group, launched to build an Asian radio network on the back of Virgin's successful European radio operations.

In Thailand, Virgin BEC-Tero Radio was established in July 2002 by Virgin Radio Asia and BEC-Tero Entertainment (a subsidiary of BEC-World Plc, Thailand's largest media conglomerate). Virgin BEC-Tero Radio has agreements with You & I Corp (another subsidiary of BEC-World Plc) and BEC-World Plc to provide radio programming and consulting services for the four radio stations.

For its Indian radio arm, Virgin partnered with the Hindustan Times - a leading Indian media group - to operate commercial radio stations in Bangalore, Delhi, Kolkata and Mumbai. The Hindustan Times acquired the necessary radio broadcast licenses this January. Virgin Radio International is now assisting the Hindustan Times in making the necessary preparations to begin operations by providing radio management expertise, with a focus on programming. The Delhi and Mumbai stations are expected to launch late this year, with Bangalore and Kolkata following in 2007.

Broadcasting in Asia has not been a bed of roses, though. In September 2004, Virgin Radio dropped off the air in Beijing after a financial disagreement with government broadcaster China Radio International, its partner there, which was reported to have upped its cut eightfold.

Virgin Mobile
Ever optimistic about the China market generally, though, Virgin then quickly announced in December 2004 that it had earmarked US$300 million for a mobile-phone joint venture on the Chinese mainland, now the world's largest mobile-telephony market, with an estimated 404 million subscribers as of this February.

Virgin Mobile, which plans to enter China's mobile communication market this year, is understood to be planning a joint venture with China Unicom (China United Telecommunications), the second-largest mobile operator in the country, with a Shanghai launch seeming likely.

China's recent commitment to the World Trade Organization allows foreign companies to operate mobile voice and data services in and between 17 major Chinese cities by setting up joint ventures with domestic operators. Virgin Mobile has already established a Shanghai office, christening it Wei Zhen Lian Xun or "Virgin United Communications".

It is believed that, emulating its business model in the United Kingdom, Virgin Mobile will lease China Unicom's mobile network and become a "virtual operator".

The group has also tried to leverage its experience in broadcasting and mobile telephony by entering the music-to-mobile business, which allows mobile-phone users to listen to radio programming. In March 2005, Virgin Radio became the first station to offer its broadcasts over third-generation (3G) and/or 2.5G connections, developed by Singapore-based music-to-mobile solutions provider Sydus.

Airlines
At a press conference in Hong Kong in December, Branson, who had just visited Shanghai, was giving nothing away about mobile plans. Instead, he spoke of the launch of daily Virgin Atlantic flights between Shanghai and London.

"Virgin is the first airline to offer this route daily," he declared, adding: "Virgin will also double its daily service between London and Hong Kong from 2006 - probably in the autumn. Our flights to Hong Kong are always full, so this is a natural expansion."

He also plugged Virgin Galactic, which says it will offer sub-orbital space trips starting in 2008, using technology developed to win the Ansari X-Prize. Although the first spaceport would be in the United States, Branson said, he added that it was not impossible that more would be built, and that one of these might be in Asia.

Elsewhere in the Asia-Pacific region, Virgin's Australasia-based airlines, Virgin Blue (based in Australia) and Pacific Blue (based in New Zealand), operate a fleet of 50 modern Boeing 737 aircraft, flying to 23 destinations across Australia, and offering international destinations that include New Zealand, Vanuatu, Fiji and Rarotonga.

Despite the airlines' success and the fact that Virgin Blue has picked up a handful of awards, including recently being named Best Low-Cost Airline of the Year 2005 by the British-based Official Airline Guide (OAG) for the second year in a row, Branson said at the Hong Kong press conference that he had no intention of taking on other markets for low-cost short flights at that time. He did say, with raised eyebrows, that the prospects for expanded low-cost operations in China, at some time in the future, could be exciting and were not to be ruled out.

On March 31, Virgin Atlantic announced a new reciprocal code-sharing deal with Air China that enables passengers "to enjoy code-share connections between the services of the two carriers". Effective on flights from July 1, the agreement with Air China means that Virgin Atlantic passengers will be able to purchase flights between London Heathrow and Beijing, complementing Virgin Atlantic's daily flights into Shanghai. Air China will code-share on Virgin Atlantic's daily services between London Heathrow and Shanghai.

Virgin's London-to-India (Mumbai) flights, launched last spring with three flights weekly, prompted Branson to voice interest in domestic Indian routes at the launch. Daily Virgin Atlantic services from London to Dubai are scheduled to commence on June 1.

Summing up Virgin Group's operations in Hong Kong, Branson said that while in all fields the company takes on it is usually smaller than the competition, he feels his products and services have captured consumers with their reliability and "fun spirit".

"Twenty years ago, we [Virgin Atlantic] were competing with big airline companies and we had just one airplane - some of those, like TWA and Pan-Am, are no longer around."

Andrew Dembina is a freelance writer. Based in Hong Kong for 13 years, he was previously editor of Hong Kong Life, the Sunday magazine of The Standard newspaper in Hong Kong.

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