MVNO Virgin Mobile marked the second anniversary of its South African business this week by calling for the local regulator to encourage growth in the market by relaxing its laws around MVNOs, reports South Africa’s Business Day. Under current South African law, virtual operators without their own network licenses are not allowed, which has meant Virgin has had to create a joint-venture with Cell C – South Africa’s third-largest mobile operator – to run its operations. CEO Peter Boyd said he would also like to see companies such as Discovery Health or Kulula Airlines become virtual operators in the market.

In addition, Boyd called for the regulator to cut interconnection fees in order to make the market more attractive for smaller players. As Virgin Mobile only has a 1.1 percent share of the market, almost 99 percent of its traffic goes via other mobile operators such as MTN, Vodacom or Cell C, requiring it to pay interconnection fees in most cases. Boyd said this meant that smaller players were disadvantaged, as they had to hand over much of their potential profit to bigger rivals. Virgin Mobile’s South African operation reported 495,000 customers in its second year, up from 100,000 in the first year. It says it expects to report a profit in 2010 or 2011.