Optus shutting down Virgin Mobile and the ACCC issues a $1.5 million fine

A bad day for Optus today with the company copping a $1.5 million fine from the ACCC over misleading customers, while at the same time the company looks set to announce the Virgin Mobile brand will be closed resulting in up to 200 job losses.

Optus wholly owns the Virgin Mobile brand and has moved it from a mainly prepaid play many years back to a more traditional phone and contract style business – however with competition increasing in the mobile space it seems Virgin couldn’t keep up.

Likely the costs of maintaining the Virgin brand through licence fees to the Virgin parent company in the UK would have impacted on the business, nonetheless there are tens of thousands of customers set to be affected.

Because the brand operates entirely within Optus’ existing systems it’s likely customers will be migrated almost seamlessly to the Optus billing system, and the change could take 12 to 18 months to complete given contracts that would be in place with customers.

An Optus spokesperson confirmed the closure of Virgin Mobile, telling EFTM “Optus will phase out use of the Virgin Mobile brand over the next two years.”

Going on to say “Virgin Mobile customers can continue to use their service in the same way they always have. We will be contacting them in the coming days to let them know more about the changes and their future options.

It’s understood Virgin operates over 30 retail stores which would also close, meaning job losses at the head office and retail level adding up to around 200 jobs in total.

Optus tells us that “For Virgin Mobile employees, our policy is always to talk to those who may be impacted by these changes first. Any potential options for redeployment within the wider Optus business will be discussed with affected individuals at that time” so there’s some strong hope that those at the retail level and other areas of Virgin might find new roles within Optus or Optus stores.

On the same day, the ACCC reported on it’s findings into an investigation of Misleading customers over the transition from their own HFC Cable network to the NBN.

Optus Cable customers had been sent letters advising that their service would cease to operate on a date well before the expected 18 month transition period that is required under the NBN roll-out.

As a result, customers were urgently churning from the Cable to the NBN network, perhaps not getting the opportunity to correctly research their own options for NBN coverage.

The $1.5 million penalty is in addition to compensation Optus has paid to customers affected.

Any customer who had Optus Cable and switched to Optus NBN or paid any additional costs in the transition should contact Optus customer service.