News that SA is getting another mobile virtual network operator, the second after Virgin Mobile, might seem like a bit of a yawn at first. But given Red Bull’s powerful marketing and youthful brand image, it could carve a niche in a maturing market.

Red Bull, the Austrian energy-drinks company, is certainly not synonymous with mobile phones. But the company has carefully crafted a youthful, cool, vibrant image for itself. It sponsors dozens of events every year in SA, and is well known internationally for its sponsorship of Formula 1. And if there’s one must-have tool for the under-30s it’s an Internet-connected smartphone.

We don’t know much yet about Red Bull’s strategy for mobile — that should become clearer after the launch on 8 February — but analysts have already begun weighing up its chances of success, and they’re generally quite bullish about its prospects.

Mobile virtual network operators haven’t proliferated in SA like they have in developed markets in Western Europe and North America.

When Virgin Mobile entered the SA market five years ago, it made optimistic projections about grabbing a significant share of the market, promising to shake up the local cellphone industry. But it may have entered the market too early in the cycle.

Virgin founder and chairman Richard Branson blasted off in a fighter jet, attempting to break some or other world record, and making grand claims that the company was here to rescue consumers from SA’s uncompetitive telecommunications operators and banks. (He launched financial services business Virgin Money at the same time.)

But despite Branson hamming it up for the cameras, and saturation media coverage of the launch of Virgin Mobile and Virgin Money, neither business really lived up to the hype.

Virgin Mobile at one point predicted it could take 10% of SA’s cellphone market. Five years later, it’s still in business, but has less than 1% of the market, with about 300 000 subscribers. It had to scale back its operations a couple of years ago, letting go of staff in the process.

Can Red Bull, which, like Virgin, will piggyback on Cell C’s network, be more successful? Analysts say virtual operators make more sense in mature markets. When Virgin invested, the cellphone market was still booming, with the incumbent operators adding millions of new subscribers a month between them.

That growth has only recently begun to slow, with penetration rates now well over 100% as measured by the number of active Sim cards in the market. Actual penetration is believed to be somewhere between 70% and 80%. When Virgin invested, that figure was less than 50%.

The key to Red Bull’s success probably won’t be in offering discounted tariffs. Rather, it’s likely to try to appeal to people who identify with its brand. And it’s a powerful brand that the company spends a small fortune nurturing through events — many of them related to sports such as surfing and mountain biking that appeal to a youthful and energetic audience.

Analysts say Red Bull will probably offer its mobile customers access to exclusive content on their phones, keeping them engaged with the brand.

It’s also unlikely that Red Bull will aim for a big chunk of the market. It’ll probably be content with operating in a niche. What will be interesting is what handsets it sells. Smartphones that appeal to youngsters who spend their lives in Facebook and MXit are likely to feature strongly.

We’ll know more next month, but one thing seems certain: its entry into the mobile market is sure to add some, err, energy to local telecoms.

Duncan McLeod is editor of TechCentral; this column is also published in Financial Mail
Update: Cell C CEO Lars Reichelt has revealed, subsequent to the publication of this column, that Red Bull Mobile will not be a fully fledged mobile virtual network operator